The US government has come under increasing criticism during the past year for civilian deaths during operations against Taliban and al-Qaeda fighters in Afghanistan.
"US and international forces take extensive precautions to avoid loss of life among Afghan civilians as well as international and Afghan forces during operations against insurgents and terrorists," Wood said.
'Dozens of dead'
Colonel Greg Julian, a US military spokesman, acknowledged that a battle had taken place, but could not say if there had been civilian deaths.
|Bala Baluk is in the western province of Farah
"Once we get eyes on the ground we will have a better idea of what may have happened," Julian said.
However, the International Committee of the Red Cross (ICRC) said on Wednesday that dozens of dead bodies, including women and children, had been seen at the site.
The ICRC sent a team to Bala Baluk late the previous day after reports of the incident emerged.
Monday's attack occurred after Taliban fighters killed three former government officials in a village for co-operating with the state, Rohul Amin, the governor of Farah province said.
Amin said that villagers had brought lorry loads of bodies to his office in the provincial capital as proof of their death.
The final toll may prove higher as villagers were said to have sought refuge in buildings which were destroyed in the bombing.
US and Afghan investigators will visit the site.
Hamid Karzai, the Afghan president, is in Washington DC for talks with Barack Obama and Asif Ali Zardari, his US and Pakistani counterparts respectively.
The meeting is being held to address the war against the Taliban in both nations.
The Taliban has used Pakistan's border region with Afghanistan as a base to launch attacks in the two countries since their five-year rule in Kabul was ended by a US military invasion in 2001.
Washington has heightened its focus on fighting the Taliban since the Obama administration assumed power this year, with an added 21,000 troops being sent to Afghanistan.
There are more than 30,000 US troops in Afghanistan already, alongside a similar number of troops from other foreign nations.
Last year about 2,000 civilians were killed in fighting against the Taliban, according to the UN.