At least seven people, including two US citizens, have died in a powerful blast in central Kabul, Afghan officials say.
There are fears that the death toll will grow further
The explosion occurred in an upmarket area near the office of a US security firm reportedly used by Afghan President Hamid Karzai.
A spokesman for the hardline Taleban militia said one of their fighters had detonated a remote-controlled bomb.
President Karzai condemned the attack, saying it was an attempt to disrupt forthcoming presidential elections.
His office said the dead included three Nepalese nationals and two Afghans, one of them a child.
"The enemies of Afghanistan will expedite their efforts to harm the election process and threaten the people's security and prosperity," the statement said.
Earlier reports had indicated the explosion was a suicide attack but news agencies now quote the Taleban as saying their fighter survived the blast.
Al-Jazeera satellite television said it had received telephone calls from Taleban spokesmen who said the attack had targeted US forces, not Afghans.
The death toll is likely to rise, officials said.
The Kabul attack came just hours after an explosion at a school in southern Afghanistan killed at least 10 people, many of them children, the US military said.
It was unclear whether Saturday's blast in the south-eastern Paktia province was the result of an accident or an attack.
The building that was hit in Kabul is used by Dyncorp, an American security firm which provides bodyguards for President Karzai and also helps with police training.
A western security adviser whose office is nearby said there was now a huge crater outside the building.
Police rushed to seal off the area, as fire and smoke billowed up and sirens wailed. Witnesses said there was extensive damage.
Security officials from the American embassy also arrived at the scene of the blast.
The BBC's Andrew North reports that the sound of the explosion, which happened just before 1800 local time (1330 GMT), was heard across Kabul.
There have been growing fears that militants opposed to the Afghan government will carry out bomb attacks in Kabul ahead of elections in October, our correspondent says.
The Taleban were ousted from power by a US-led campaign in 2001 and have since waged a guerrilla campaign against foreign and Afghan government targets.