The blast, which was caused by explosive devices in a truck in Kabul's Shar-i-Naw district where dozens of aid agencies are based, killed mostly non-Afghan nationals, police sources said.
Aljazeera's correspondent in Kabul, Wali Allah Shahin, said the explosion was thought to have targeted the US Anti-Terrorism centre in Kabul and about 20 people, mostly Afghan guards, were killed in the attack.
He said six US Embassy cars were blown up in the blast on Sunday afternoon.
In a phone message to Aljazeera, Taliban officials claimed their group was behind the attack. The Taliban operative was killed carrying out the attack.
"We received two phone calls from two Taliban spokespersons - Mulla Janan and Mulla Hakim - who claimed the movement's responsibility for the blast and regretted the injuries inflicted on some Afghan people who were accidentally passing by the area," said Mazin Aman Allah, another Aljazeera correspondent in the city.Dead bodies
Following the blast, fire and smoke could be seen rising from the area which was cordoned off by Afghan forces.
It is unclear how many people
were killed in the blast
An interior ministry official said the explosion happened beside the office of the International Organisation for Migration, but did not have any more details.
Residents said they saw several dead bodies lying on the ground as ambulances rushed to the area to transfer injured people to hospitals for treatment.
A police official said another bomb was found near the site of the explosion and security forces were trying to defuse it.
Shahin also reported that an Aljazeera cameraman was beaten up by US troops in the area, although US officials have yet to respond to the allegation.