Afghan security sources say the attack possibly targeted a minibus in a crowded market in western Kabul.
A Taliban suicide attacker detonated a car bomb in the western part of Kabul on Monday, killing at least 35 people and wounding more than 60, and the death toll could rise, an Interior Ministry spokesman in the Afghan capital said.
Police cordoned off the area, located near the house of the deputy government Chief Executive Mohammad Mohaqiq in a part of the city where many of the mainly Shia Hazara community live, but they said the target of the attack was so far unclear.
TRT World's Bilal Sarwary has the latest from Kabul.
"I was in my shop when suddenly I heard a terrible sound and as a result, all of my shop windows shattered," said Ali Ahmed, a resident in the area of Monday's blast.
Salim Rasouli, director of the city's hospitals, said at least 13 of the dead and 17 wounded had been taken to hospitals.
The latest suicide bombing adds to the unrelenting violence in Afghanistan, where at least 1,662 civilians were killed in the first half of the year. It came two weeks after Daesh claimed an attack on a mosque in the capital that killed at least four people.
Kabul has accounted for at least 20 percent of all civilian casualties this year, including at least 150 people killed in a massive truck bomb attack at the end of May, according to UN figures.
Taliban on rampage
The Taliban, which is battling the Western-backed government and a NATO-led coalition for control of Afghanistan, launched a wave of attacks around the country in recent days, sparking fighting in more than half a dozen provinces.
Taliban spokesman Zabihullah Mujahid claimed responsibility for the attack on behalf of the militant group in a post on Twitter, saying 37 "intelligence workers" had been killed.
The Taliban often exaggerate the scale of attacks against Afghan government and foreign targets.
Mujahid said the target of the attack had been two buses that had been under surveillance for two months.
Government security forces said a small bus owned by the Ministry of Mines had been destroyed in the blast.
Three civilian vehicles and 15 shops were destroyed or damaged in the blast, the Interior Ministry said in a statement.
On Sunday, dozens of Afghan troops were under siege after Taliban fighters overran a district in northern Faryab province, a spokesman for the provincial police said.
There was also fighting in Baghlan, Badakhshan, Kunduz, Kandahar, Helmand, and Uruzgan provinces, according to officials.
The resurgence of violence coincides with the US administration weighing up its strategic options for Afghanistan, including the possibility of sending more troops to bolster the training and advisory mission already helping Afghan forces.