A NATO airstrike in southern Afghanistan has killed 33 people after an aircraft fired on civilians mistakenly thought to be insurgents, the Afghan government said on Monday.

The Afghan cabinet condemned the killings near the border of Uruzgan and Dai Kondi provinces as unjustifiable. Such casualties are a major source of anger among Afghans and Sunday's toll was the highest number of civilian deaths in months.

The incident was not part of Operation Mushtarak, the major NATO-led offensive to clear Taliban militants out of neighboring Helmand province in the south.

Nonetheless, it could still hurt Afghan government and NATO efforts to win support from the local population under a plan to wrest control of Taliban strongholds before the start of a gradual U.S. troop withdrawal in 2011.

Initial reports indicate that NATO fired Sunday on a convoy of three vehicles ... killing at least 33 civilians, including four women and one child, and injuring 12 others, the Afghan cabinet said in a statement.

Civilian casualties have caused friction between the Afghan government and foreign forces in Afghanistan, who have launched two big offensives in the past eight months in a bid to turn the tide of a growing Taliban-led insurgency.

The NATO-led International Security Assistance Force (ISAF) said in a statement civilians had been killed as they approached a joint NATO-Afghan unit, but did not say how many.

An investigation has begun, it said.

We are extremely saddened by the tragic loss of innocent lives, U.S. General Stanley McChrystal, commander of NATO forces in Afghanistan, said in the ISAF statement.

I have made it clear to our forces that we are here to protect the Afghan people and inadvertently killing or injuring civilians undermines their trust and confidence in our mission, he said.

U.S. Marines say they have taken extra caution to avoid civilian deaths in a major NATO offensive in Marjah in Helmand, Afghanistan's most violent province. Civilian deaths have long undermined local support for U.S. and allied Afghan troops.

At least 12 people were killed in a poorly targeted rocket strike the day after Operation Mushtarak started this month.

Taliban fighters continue to put up stiff resistance to Marine units from scattered areas in Helmand, although NATO's main focus now is on clearing up roadside bombs and bunkers.

(Writing by Michael Georgy; Editing by Bryson Hull and Paul Tait)