Let's break this down. First one witness outright denies that there were any Taliban present whatsoever.

NYTimes:
Zalmai Ayoubi, a spokesman for the governor of Kandahar, said that a NATO reconnaissance aircraft spotted five militants planting mines in the village of Siacha, in Zhare District on Wednesday. The plane targeted the insurgents, killing two and wounding a third, and then pursued the other two suspects as they carried their injured comrade away.

"The plane chased them, the insurgents entered a street where children were playing and as a result of its shooting, seven people have been killed, including six children, and two girls also have been injured," Mr. Ayoubi said. The victims were members of two families.

Abdul Samad, an uncle of four of the children who were killed, disputed the government's version of the attack. He said his relatives were working in fields near their village when they were attacked without warning by an aircraft.

His brother-in-law, Mohammad Rahim, 50, had his two sons and three daughters with him. They were between 4 and 12 years old and all were killed, except an 8-year-old daughter, who was badly wounded, Mr. Samad said.

"There were no Taliban in the field, this is a baseless allegation that the Taliban were planting mines," Mr. Samad said. "I have been to the scene and haven't found a single bit of evidence of bombs or any other weapons. The Americans did a serious crime against innocent children, they will never ever be forgiven."
The Agence France-Press also reports the governor's version, that insurgents ran into a village to hide.
The Kandahar governor's office said the air strike was aimed against insurgents who were planting mines, but they then fled into a village, where ISAF forces pursued them and struck.

The NATO-led International Security Assistance Force in Kabul acknowledged that the "unfortunate" incident had involved "several civilians being killed and injured" and said it came in response to insurgent action.
But then the kicker, as NATO lets slip that it, and its pilots, know full well that insurgents seek out civilians to hide among "frequently,":
ISAF commanders say the Taliban and other insurgents frequently hide among the local population in a bid to protect themselves.
"Frequently."

Question: Wouldn't that tell any pilot who can't see what he is shooting at, say a blind alley, that it is not just possible, but indeed probable that civilians are present? "Frequently."

Karzai has issued a statement condemning the attacks and promising an "investigation."

On this Occupy Wall Street Thanksgiving when we are privileged to be alive to witness the Great Awakening of the American people, let these senseless deaths finally start a new page in our policy in Afghanistan.

We demand that Congress pass Rep. Barbara Lee-Rep. Ron Paul H.R. 780: "Responsible End to the War in Afghanistan Act" - "To provide that funds for operations of the Armed Forces in Afghanistan shall be obligated and expended only for purposes of providing for the safe and orderly withdrawal from Afghanistan" (emphasis mine.) As part of an orderly withdrawal we demand Congress devote 5% of one year's cost of military operations as reparations, to jump-start Afghan-run infrastructure programs run by the indigenous, honest, and efficient Afghan National Solidarity Program.

Afghan Youth Peace Volunteers, Zekerullah, "If you should kill me unawares, please remember..."