About 15 bystanders were injured in the attack on NATO forces travelling in heavily armoured vehicles on a main road in Lashkar Gah, the capital of volatile Helmand.
“Four civilians were killed and 15 wounded,” provincial spokesman Omar Zuwak told AFP.
There were no confirmed military casualties, and ISAF declined give any details.
About 87,000 international troops are deployed in Afghanistan to fight the Islamist insurgency that erupted after the hardline Taliban regime was ousted from power in 2001.
Elsewhere in Afghanistan on Wednesday, four drivers were killed and 40 trucks carrying NATO fuel supplies set ablaze when a rocket was fired at a parking lot in the western province of Farah.
The provincial spokesman blamed the Taliban for the attack on trucks that had parked for the night to avoid using the dangerous highway in the dark.
According to a recent United Nations report, civilian casualties in the Afghan war rose 23 percent in the first half of this year due to Taliban attacks and increased fighting between insurgents and government forces.
The Taliban have increased attacks during the summer fighting season as newly-trained Afghan soldiers and police take over from NATO forces, but the insurgents have made no significant territorial gains.