The cafe is at the front of a guest house used by Westerners in the heart of the city.
"Two people have been killed and five wounded by the bomb blast," Kabul police chief Akram Khakrizwal told Reuters.
Speaking to reporters in front of the damaged cafe, he later described the blast as an act of terrorism.
Kabul has seen occasional bomb blasts, including suicide attacks against Nato-led peacekeepers, since US-led forces overthrew the Taliban government in late 2001.
The deadliest attack was in September 2002 when more than 20 people were killed and scores wounded by a car bomb on a busy city street.
Previous attacks have targeted
foreign troops in Afghanistan
Four German soldiers were killed and 31 wounded in June 2003 by a suicide bomber. The most recent blast was two weeks ago, but it caused no casualties.
No one had claimed responsibility for Saturday's explosion, and it was too early to say who might have been behind it, another police official said. No arrests had been made, he said.
Most bomb attacks in Afghanistan have been blamed on Taliban insurgents, who have been fighting the US-backed government and US-led forces since their ouster, or allied Islamic groups, such as members of Osama bin Laden's al-Qaida.
A Taliban spokesman, Abdul Latif Hakimi, who often claims responsibility for attacks on behalf of the Taliban, said by telephone from an undisclosed location he did not know if Taliban guerrillas had carried out the attack.