Skirmishes between Taliban fighters and Afghan security forces recommence after a three-day ceasefire expired in Afghanistan.
The prisoner swap is part of confidence-building measures crucial for the success of the peace deal signed between the US and the Taliban to end nearly two decades of war.
The blast occurred in Helmand province where both the Taliban and Daesh are said to be active.
With an election coming up in November, Trump is keen to make good on pledge to end America's longest war, but observers say it appears the Taliban have yet to be convinced to come to the negotiating table with Kabul.
The peace process is going through its most intricate phase as Afghan leaders from all sides struggle to find common ground.
The escape of a notorious militant and the strong-arming of the state by a radical cleric has brought Pakistan's fight against militancy into question.
The apparent insider attack, which took place in Nangarhar province, occurred after a combined US and Afghan force was returning from a "key-leader engagement," Colonel Sonny Leggett, a spokesman for US forces in Afghanistan, said in a statement.
"The mortar fired from Afghanistan hit the house of local villager Fazal Ghani. He along with his wife and five other members of the family died on spot," a senior Pakistani official says. The dead included three women, three children and a man.
Manzoor Pashteen, head of the Pashtun Protection Movement, was arrested in a pre-dawn raid in the northwestern city of Peshawar on charges of making anti-government speeches at rallies and inciting violence, a local police official says.
Iran has limited influence over the Taliban and little to gain from prolonging the war.
The Taliban is expected to discuss these terms with US negotiators in Doha, two sources said. If such an agreement is reached, it will revive hopes for a long-term solution to the war in Afghanistan.
An escalated conflict between the US and Iran will reverberate in Pakistan and Afghanistan.
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