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A suicide bomber killed at least 16 people Thursday and wounded 40 others, including a prominent lawmaker, at an anti-corruption rally in eastern Afghanistan, the latest casualties ahead of the Taliban's expected spring offensive.

The attack comes just a week after Washington announced it would not be halving the 9,800 US troops still in Afghanistan by the end of the year, backpedalling on previous plans.

The Taliban, waging a deadly insurgency since they were ousted from power in late 2001, warned that the US troop announcement would damage any prospects of peace talks as they vowed to continue fighting.

Thursday's attack targeted an anti-graft demonstration outside the residence of the acting governor of restive Khost province, sending terrified, blood-soaked victims fleeing for cover.

Severed limbs and body parts lay strewn around the area after the powerful blast, according to an AFP reporter at the scene.

The area was cordoned off by security officials as yellow-helmeted firefighters used water hoses to douse the smouldering scene of the explosion.

"Today morning, a suicide attack was carried out by the enemies of peace and stability of Afghanistan at a rally in the city of Khost, in which 16 people were martyred, and 40 others were wounded," said Abduljabar Naeemi, the acting governor of Khost province, which borders Pakistan.

Humayoun Humayoun, a well-known MP from Khost province, was among those wounded, Naeemi added in his statement.

The interior ministry in Kabul said 17 civilians were killed and 37 others were wounded in the explosion, adding that it "strongly condemns the terrorist attack".

- 'Cowardly attack' -

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Suicide blast kills at least 16 in east Afghanistan