The explosion occurred in a district where dozens of civilians, members of the Taliban and government security forces were celebrating the cease-fire and the Islamic festival of Eid, said Attaullah Khogyani, a spokesman for the provincial governor.
Najibullah Kamawal, director of the health department in the eastern Nangarhar province, says another 65 people were wounded in Saturday's attack.
He also asked the Taliban to extend their three-day ceasefire, which is due to end on Sunday, and begin peace talks.
Taliban militants headed into cities across Afghanistan on Sunday as they continued to celebrate the ceasefire, raising questions about what happens when the ceasefire ends.
While no militant organisation has yet claimed responsibility, the Islamic State affiliate, which did not sign on to the ceasefire, has a strong presence in the area.
Taliban fighters and security forces embraced and took selfies with each other over the first two days of the Eid holiday.
President Ashraf Ghani said on Saturday he would extend the government ceasefire beyond June 20 and on Sunday the presidential office said it would be extended by 10 days.
Over the weekend, ecstatic men and children crowded around the soldiers and Taliban fighters, some of whom had checked in their weapons at the entrances to cities, and urged them to turn their ceasefire into a permanent peace.
"So far, no decision has been made for the extension of the ceasefire, so today is the last day of our three-day truce", Taliban spokesman Zabihullah Mujahid said.
Previously, IS fighters have clashed with Taliban, who have registered their demands for a caliphate.
Afghan Deputy Interior Minister Masood Azizi said the ceasefire was being monitored throughout the country.
But some Taliban commanders also told AFP they disapproved of their fighters visiting government-controlled areas and celebrating with security forces.
"I am so happy for the cease-fire and it is sad when every day Afghans are killing each other", said Faizani, adding that 15 of his friends died in battles with Afghan security forces in one year.
The Taliban, wearing traditional headgear and many with sunglasses, entered Kabul through gates in the south and southeast.
The US commander of North Atlantic Treaty Organisation forces in Afghanistan General John Nicholson said recently that the Taliban was engaged in a process of "talking and fighting", and that some factions were involved in secret peace negotiations.
Nangarhar Province is the main base of IS militants in Afghanistan.
The Taliban also said the "entire nation" should realize that there are "no public or secret talks taking place with the puppet Kabul regime".
U.S. Secretary of State Mike Pompeo, echoing Ghani's announcement on Saturday, said peace talks would have to include a discussion on the role of "international actors and forces". But they have refused to meet with the United States-backed government, saying they will only negotiate with the U.S. directly.
Government officials urged the militants not to return to fighting, as dozens of unarmed Taliban exchanged Eid greetings with soldiers and civilians.
"We have no intention to extend the ceasefire".