Afghan Voice Agency(AVA)_Monitoring, Khost police confirmed the incident and said the explosion took place at a hotel close to Spin mosque in the city.
Early reports indicate Waziristan refugees were among the casualties.
Police said the dead and injured have been taken to hospital and the leadership of the provincial administration has ordered officials to provide proper medical treatment to the injured.
Security forces have cordoned off the area and have started an investigation into the incident.
No group or person has yet claimed responsibility for the explosion.