The explosion rocked the Afghan capital's affluent Sherpur area, said Kabul police spokesman Basir Mujahid. At least three insurgents are involved in the attack, a police official said. The security forces cordoned off the area.

Reports suggest that the blast appeared to have taken place in a car and gunfire was reported immediately after. At least seven people injured in the attack were brought to a hospital for treatment.

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Sherpur is home to several foreign NGOs and residences of senior government officials, including former warlord Abdul Rashid Dostum, Afghanistan's first vice-president.

The blast, which interrupted several months of relative calm in Kabul, came after President Ashraf Ghani returned from a regional peace conference in Islamabad aimed at reviving stalled peace talks with Taliban militants.