The bomb exploded at the entrance to a giant tent, near residential buildings in the west of Kabul, after most of the clerics had left, a witness said. Women living nearby were crying as they gathered with their families.
"People were wounded, people were shouting," a witness told Reuters.
No group immediately claimed responsibility for the attack, which underlines deteriorating security ahead of parliamentary and district council elections set for Oct. 20.
More than 2,000 religious scholars from across the country began meeting on Sunday at the Loya Jirga (Grand Council) tent, denouncing years of conflict. They issued a fatwa, or religious ruling, outlawing suicide bombings and demanding that Taliban terrorists restore peace to allow foreign troops to leave.
A series of bombings in Kabul has killed dozens of people in recent months and shown no sign of easing during the Muslim holy month of Ramadan.
On Wednesday, gunmen armed with assault rifles and grenade launchers stormed the heavily fortified headquarters of the interior ministry, battling security forces for more than two hours.
A week earlier, 60 people were killed and more than 100 wounded when a suicide bomber blew himself up outside a voter registration centre in the city.
Terror group ISIS has claimed responsibility for many attacks in Kabul but security officials say several are much more likely to be the work of the Haqqani network, a group affiliated with the Taliban.
Provincial cities have also been hit as the Taliban have stepped up operations across the country since they announced the beginning of their annual spring offensive in April.