A Turkish embassy vehicle was damaged and casualties were expected, Deputy Interior Minister Mohammad Ayub Salangi said.
"The target was a Turkish embassy vehicle, one person is wounded and the driver possibly killed," he told media outside the Iranian embassy.
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The Taliban claimed responsibility for the blast in a text message to media, saying that the target was a "convoy of foreigners' vehicles."
Associated Press television footage showed two black armored vehicles bearing Turkish diplomatic plates and at least one wounded person being carried from a car.
It is the first known attack on a Turkish target in the Afghan capital. The last similar suicide car attack in Kabul took place near the airport in January.
Insurgent attacks in the capital have been intermittent in recent months as winter has closed in and as access for militants who are believed to be based in neighboring Pakistan is limited.
The Afghan government hopes to open a dialogue with the Taliban's leadership in the near future, which could lead to peace talks in the coming year or two, officials and diplomats have said.
In the meantime, the insurgents are expected to intensify their war, in order to enter any talks from a position of strength.
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