Security source told media that the blast took place when a vehicle exploded near a convoy of foreign forces in rush hours in the capital.
Members of the Islamic State claimed responsibility for the bombing.
There was no immediate report on whether any foreign troops were injured in the blast.
The lone attacker targeted a convoy of foreign troops' armored vehicles in the Macroryan area close to the US military base in Kabul at around 8 a.m. local time (0430GMT).
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North Atlantic Treaty Organisation said three coalition service members had received "non-life threatening wounds" in the attack.
Although the Afghan branch of ISIS operates largely in the eastern province of Nangarhar, on the border with Pakistan, the movement has also claimed a string of suicide attacks in Kabul. "The barbarity and depravity of this attack only reminds all Americans of why we are in this fight and strengthens our dedication and solidarity with our Afghan allies".
The annual offensive normally marks an upsurge in fighting during warmer weather, though this winter the Taliban continued to battle government forces.
The attack took place in front of the presidential palace's administrative affairs office.
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All those killed were Afghan civilians.
The blast rocked the area near the United States embassy in Afghanistan, a security official reported.
Monday's blast also comes days after the Taliban launched their "spring offensive", heralding a surge in fighting as the U.S. seeks to craft a new Afghan strategy and North Atlantic Treaty Organisation mulls boosting troop levels to break the "stalemate" against the resurgent militants.
"Deeply saddened by the terrorist attack killing innocent civilians in Kabul".
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