A spokesman for the provincial governor of Nangarhar, Attaullah Khogyani, confirmed a auto bomb was responsible for the blast in the town of Ghazi Aminullah Khan, on the main Torkham-Jalalabad road, and said dozens were wounded.
The government's ceasefire was due to end on Tuesday.
Among the dead were Taliban fighters, Khogyani said.
The Islamic State group, which was not part of the truce, claimed it had carried out its second suicide attack in two days in the province of Nangarhar.
Afghan Muslims celebrated the start of the Eid al-Fitr holiday on Friday.
Amrullah Saleh, a spy chief-turned-politician who has in the past opposed negotiations with the Taliban until they lay down their arms, told Reuters the Afghan president had made "a grave mistake" allowing them into government-controlled areas. UNAMA also said it highly appreciates the decision of Ghani responding to the overwhelming voice of the people of Afghanistan to extend the ceasefire.
The devastating explosion came as previously unthinkable scenes of unarmed Taliban fighters celebrating Eid, often alongside Afghan security forces, played out in cities throughout the war-shattered country on Friday and again on Saturday, The Associated Press reported.
USA forces in Afghanistan also said they would respect the ceasefire with the Taliban.
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Islamic State extremists claimed responsibility for a similar attack on June 16 in the Nangarhar region, in which at least 36 people were killed and 65 others wounded at a gathering of Taliban and government armed forces.
Afghans shared photos on social media purportedly showing Taliban fighters around the country gathering with security forces and locals for the holiday.
In many cities, Taliban fighters left their weapons at the gates when they went to Eid celebrations.
It was the first formal nationwide ceasefire since the 2001 United States invasion and the display of jubilation and unity has fuelled hopes among war-weary Afghans that peace is possible. In Kabul, a statement from USA military officials echoed Ghani's declaration that such talks must include a discussion of the role of foreign forces.
Washington has until now said any negotiations were exclusively for the Afghan government, but the Taliban has said it will not deal with what it calls a puppet regime.
There was no immediate word from the Taliban on whether they would observe the extension.
There were also rare scenes of impromptu diplomacy as the interior minister, Wais Barmak, met Taliban members on the outskirts of the capital and district governors broke bread with their Taliban "shadow" counterparts over lunch."I'm 40 years old and this is the best Eid I've had in my entire life", one Kandahar resident said on a BBC radio phone-in.
"U.S. forces conducted a counterterrorism strike, June 13, in Kunar province, close to the border between Afghanistan and Pakistan, which targeted a senior leader of a designated terrorist organization", U.S. Forces Afghanistan spokesman Lt. Col. Martin O'Donnell said in a statement.
Taliban is fighting US-led North Atlantic Treaty Organisation forces, combined under the Resolute Support mission, and Ghani's US-backed government to restore sharia, or Islamic law, after their ouster by US-led forces in 2001.