Women and children were among the dead. An investigation is underway to determine who was responsible for the strike.

"A rocket was launched. It hit a civilian house where many people sought refuge (and) 40 to 45 people were killed," Waheed Omar said, referring to a reported attack in the Sangin district of Helmand province on Friday.

Asked if the attack was carried out by NATO forces, Omar said: "We will have to wait for the final report."

Karzai ordered the National Security Council to investigate the incident, Sediq Sediqqi, head of media relations at the presidency, said earlier.

The dead included women and children, he said. Reports surfaced on Saturday that a helicopter gunship fired on villagers who had been told by insurgents to leave their homes as a firefight with troops from NATO's International Security Assistance Force (ISAF) was imminent.

According to witness accounts, men, women and children fled to Regey village and were fired on from helicopter gunships as they took cover.

Abdul Ghafar, 45, said that he lost "two daughters and one son and two sisters" in the attack.

He and six other families fled to Regey, about 500 metres (yards) from their village of Ishaqzai, after being warned about the imminent battle, he said.

Men and women took shelter in separate compounds, he said, ahead of an expected firefight between Taliban and NATO troops.

"Helicopters started firing on the compound killing almost everyone inside," he said, speaking at the Mirwais hospital in Kandahar city.

"We rushed to the house and there were eight children wounded and around 40 to 50 others killed," he said.

He took three girls and four boys to the Kandahar hospital, he said, adding: "Three of the wounded are my nephews and one is my son. One of the wounded children is four years old and has lost both parents."