Police spokesman Fareed Ahmad Obaid says at least 45 people were wounded when the rocket struck late Wednesday night during a firefight between government forces and Taliban insurgents nearby.
Bashir Ahmad Shakir, a provincial council member, said the death toll could be up to 30 with as many as 60 wounded.
Sangin, in a volatile area of the Helmand River valley, has been the scene of fighting between government forces and Taliban militants for the past six months since the withdrawal of US-led international forces.