The bomb exploded near a residential area in the west of Kabul where women were crying as they gathered with their families.
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 plan to issue a fatwa, or religious order demanding Taliban militants restore peace, allowing foreign troops to leave.
"There was panic gathering after the explosion," one security offical told Reuters, saying the death toll could rise.
The Taliban are seeking to return the country to strict Islamic rule after their 2001 ouster by U.S.-backed troops.
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.
In April, two explosions in Kabul killed at least 26 people, including nine journalists who had arrived to report on an initial blast and were targeted by a suicide bomber.
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.
Militant group Islamic State has claimed 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 fighting across the country since they announced the beginning of their annual spring offensive in April.
(Additional reporting by Hamid Shalizi; Writing by Nick Macfie; Editing by Clarence Fernandez)
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)