It was unclear whether the attackers burned the victims alive or hacked them to death before setting the building alight, officials said.
Ibrahim Syamsuddin, a spokesman for the former separatists, said the incident was related to a dispute between them and a local union over control of revenues from a local bus station.
He said some of the attackers were former members of a pro-Jakarta militia blamed for attacks on separatists and civilian sympathisers during the conflict.
Syamsuddin demanded police "uncover the truth" behind the incident.
"If they do not, a new conflict will erupt in Aceh," he said.
Police said they were investigating and there were no arrests so far.
"We are still investigating the motive behind the attack," Agus Budi Kawedar, the local police chief, told the Associated Press.
He said seven police officers could not stop the attack and it took several hours for back-up to arrive.
Situated on the northern tip of Sumatra island, resource-rich Aceh was torn by conflict for nearly 30 years before the December 2004 tsunami spurred a peace agreement between the government and the separatist Free Aceh Movement (GAM) in August 2005.
More than 15,000 people were killed in the conflict while 160,000 died in the tsunami in Aceh alone.
Irwandi Yusuf, a former GAM separatist, took over as the governor of the province last year, further cementing the peace deal.
But many former separatists and militia members have turned to gang warfare since the war ended and there have been sporadic incidents of violence, often over the sharing of resources in the province.