"Eight MK-82 general-purpose bombs were abnormally released from an Air Force KF-16 aircraft, landing outside the designated firing range," the Air Force said.
The incident occurred around 10:00 am (0100 GMT) in Pocheon, around 25 kilometres (16 miles) south of the heavily fortified border with the nuclear-armed North.
"We deeply regret the unintended release of the bombs, which resulted in civilian casualties, and wish those injured a swift recovery," the Air Force said in a statement.
It said it had established an accident response committee to investigate the incident, and said it would "take all necessary measures, including compensation for damages."
The Air Force said the military jet had been "participating in a joint live-fire exercise involving both the Air Force and Army."
South Korea was holding combined live-fire drills with the United States Thursday in Pocheon, the Yonhap news agency reported.
South Korea's National Fire Agency said that the bombs were "presumed to have fallen on a village during a South Korea-US joint exercise."
This resulted in "casualties and property damage, with many displaced residents," it said, adding that four people had been seriously injured and three suffered minor injuries.
One church building and sections of two houses were damaged, according to the statement.
- 'Like a thunderclap' -
One local resident, who gave only his surname Park, told Yonhap that he had been at home, watching television when the accident happened.
"I suddenly heard an enormous explosion, like a thunderclap, and the whole house shook. When I went outside, everything was in chaos," Park said.
Even at a senior centre about a kilometre away, the accident was felt.
"A sudden explosion shook the building. The windows shattered, and one of our teachers was injured and taken to the hospital," the centre's director, surnamed Yu, told Yonhap.
"Fortunately, none of the seniors were hurt, but they were so frightened that we sent them all home," they added.
Joint South Korea-US "Freedom Shield" military exercises, one of the security allies' largest annual joint exercises, are set to begin later this month.
The two Koreas remain technically at war since the 1950-1953 conflict ended in an armistice, not a peace treaty.
The United States stations tens of thousands of soldiers in the South, in part to protect Seoul against Pyongyang.
In 2022, a South Korean Hyunmu-2 short-range ballistic missile accidentally crashed into a military golf course in the South's eastern Gangwon province, after it was fired in response to a North Korean missile launch.
The missile did not explode and no one was injured in that incident.
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