The powerful explosion, which struck at 8:00 am (local time) in the Shah Shaheed southeastern residential district, also injured 37 passers-by including many children going to school, officials said.
In total eight Afghans died, along with two NATO soldiers and four NATO contractors who were travelling through the city's busy rush hour traffic.
Hezb-i-Islami, an insurgent group that is independent from Taliban militant forces, claimed responsibility for the attack.
Today's bomb was the first major attack in Kabul since March 9 when a suicide bomber on a bicycle killed nine people outside the defence ministry during a visit by US Defense Secretary Chuck Hagel.
It further underlined the capital's vulnerability to militant attack as 100,000 NATO troops gradually withdraw from Afghanistan ahead of the end of international combat operations next year.
"I was at home when I heard a terrible explosion and our whole building shook," Mustafa, a witness, told AFP.
Afghan health ministry official Sayed Kabir Amiri said local hospitals confirmed eight Afghans had died and 37 were wounded.
Two children aged six and 10 were among the dead. "Some of the bodies are badly damaged and can't be identified," Amiri added.
NATO's US-led International Security Assistance Force (ISAF) said in a statement that two soldiers and four ISAF-contracted civilians died.
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