The explosion was so strong that the car flew up into the air opposite Moscow's National hotel, which faces the Kremlin and the Red Square, Russian agencies said on Tuesday. Ten people were injured.
"It is presumed that two women suicide bombers were at the national building. It is certain there was one," Interfax news agency quoted Moscow mayor Yuri Luzkov, as saying.
Aljazeera's correspondent in Moscow said there were no official reports yet regarding the party behind the attack.
Major bomb attacks in Russia:
23-26 Oct, 2002 : Forty-one Chechen rebels, including 19 women, hold 800 people hostage in a Moscow theatre for 57 hours before Russian forces storm the building, killing all the rebels and 129 hostages,
victims of poisonous gas used in the attacks.
Reuters correspondent Oliver Bullough said he saw the severed head of a blonde woman next to a briefcase outside the National Hotel, several hundred metres from the Kremlin.
"We heard a big blast and then smelled burning meat," said a
female teenager interviewed by Russian television at the scene.
It was not immediately clear if President Vladimir Putin was inside the Kremlin at the time of the explosion, with the Kremlin press service refusing to confirm the Russian leader's location.
The explosion occurred two days after parliamentary elections in which allies of President Vladimir Putin scored a big victory.
Last Friday, 40 people were killed and more than 150 injured in a bomb attack on a train near the breakaway Russian republic of Chechnya.