"It was a big explosion and sent fire into the sky," Akbari Sarwar, a journalist who was on the road when the blast hit, said.
"When I moved in I saw scores of bodies, legs, arms, heads, flesh everywhere," he told the AFP news agency.
The bus was reduced to a blackened skeleton of mangled metal, its roof and sides blown out.
An official from the Kabul ambulance service said his organisation was involved in evacuating the casualties.
|The attack came as the US defence|
secretary ended his visit [AFP]
"We are involved in evacuation and there is a very high number of casualties," he said on condition of anonymity.
Many injured people, including civilians, were rushed to hospitals.
The blast was the third suicide attack in the city in the last eight days.
It came as Robert Gates, the US defence secretary, ended a surprise visit to Afghanistan where he met Hamid Karzai, the president, and military commanders to assess the rising violence in the country.
Gates, who has admitted he is concerned about the rise in violence in Afghanistan over the past few years, said that he was pushing the world's countries for more commitment to the country's future.
A suicide attack targeted the Nato-led International Security Assistance Force (ISAF) on the first full day of Gates’ visit on Tuesday, wounding 22 civilians.
The Taliban has claimed responsibility for both attacks, the latest in a wave of around 140 suicide bombings in Afghanistan this year.