The Taliban claimed responsibility for the blast which hit a police checkpoint in an area near foreign embassies and government buildings. The attack comes only days after the Intercontinental Hotel siege in the capital.
Anger was growing in Kabul Sunday, a day after a huge bomb hidden in an ambulance killed over 100 people and wounded scores more, highlighting the ability of militants to strike at the heart of Afghanistan.
At least 102 people were killed and 196 wounded in the lunchtime attack claimed by the Taliban, which caused panic in the capital and overwhelmed its hospitals.
US President Donald Trump called for "decisive action" against the Taliban over the assault - the second it has carried out in the city in a week - as other international leaders also condemned the attack.
"It is a massacre," said Dejan Panic, a coordinator in Afghanistan for the Italian aid group Emergency, which runs a nearby trauma hospital. In a message on Twitter, the group said more than 50 wounded had been brought in to that hospital alone.
TRT World's Bilal Sarwary reports.
Mirwais Yasini, a member of parliament who was nearby when the explosion occurred, said an ambulance approached the checkpoint and blew up. The target was apparently an interior ministry building nearby.
The Swedish and Dutch embassies as well as the European Union representation and an Indian consular office are also nearby.
The use of an ambulance in today’s attack in #Kabul is harrowing. This could amount to perfidy under IHL. Unacceptable and unjustifiable.— ICRC Afghanistan (@ICRC_af) January 27, 2018
Buildings hundreds of metres away were shaken by the force of the blast, which left torn bodies strewn on the street amid piles of rubble and debris.
People helped walking-wounded away as ambulances with sirens wailing inched their way through the traffic-clogged streets of the city centre.
As hospitals struggled to handle the casualties, some of the wounded were laid out in the open, with intravenous drips set up next to them.
TRT World's Philip Owira has more on the incident.
The attack happened a week after the deadly siege on the Intercontinental Hotel.
The latest attack will add pressure on President Ashraf Ghani and his US allies, who have expressed growing confidence that a new more aggressive military strategy has succeeded in driving Taliban insurgents back from major provincial centres.
The United States has stepped up its assistance to Afghan security forces and increased its air strikes against the Taliban and other militant groups, aiming to break a stalemate and force the insurgents to the negotiating table.