Three American soldiers were slightly wounded in the rush-hour attack in the centre of the city on Wednesday, said Kandahar Governor Assadullah Khalid.
"Three civilians have been killed in this suicide incident," he said. "Three US soldiers have been slightly hurt." Another four Afghan bystanders were wounded, he added.
Witnesses, however, told Aljazeera's correspondent in Kabul that two US soldiers had been killed in the attack.
A spokesperson for Kandahar's governor denied that there had been casualties among US forces.
US soldiers cordoned off the scene of the attack, and a witness said an American vehicle was on fire. A US military official confirmed the attack, but gave no further details.
Kandahar used to be the main bastion of the Taliban until US-led forces overthrew their government in 2001.
The blast wounded four Afghan
Dozens of foreign aid agencies are based in the city, which has been subjected to a series of attacks and Taliban-linked violence in the past two months.
On Monday, two car bomb attacks killed at least four people, including one German soldier with the Nato-led peacekeeping force in the capital, Kabul.
The United Nations cancelled its flights from the capital to the rest of the country for Wednesday and Thursday as a security precaution, Western sources in the capital said.
Elsewhere, in Paktika province, the US army said a soldier had been killed and another wounded. No further details of the deaths in the Gayan area were available, Aljazeera's correspondent said.
The correspondent added that five Afghans, including a police officer and four police recruits, had been killed in several blasts in Paktika province in southeast Afghanistan.