Up to 400 others were injured when the suicide attacker drove into the capital’s diplomatic quarter during the morning rush-hour before setting off explosives.
The blast left a 16ft-deep crater near Zanbaq Square in the Wazir Akbar Khan district, where foreign embassies are located, including the German premises which was badly damaged.
Most of the fatalities were civilians, including women and children. Nine Afghan security guards at the US embassy also died as well as another guard at the German equivalent.
The embassies of China, Turkey, France, India and Japan also reported damage, while the BBC said one of its drivers was killed and four of its journalists were wounded. Eleven US contractors were also hurt.
More than 50 cars were destroyed or damaged in the area which was considered Kabul’s safest neighbourhood, with buildings protected by dozens of 10ft-high blast walls.
The Afghan intelligence service, NDS, said early findings showed the Afghan Haqqani militant network with the assistance of the Pakistani intelligence service, ISI, carried out the attack.
In a statement, the NDS said: “These terrorists once again proved they don’t represent any religion and they only carry out such coward attacks to please their Pakistani masters which is against all Islamic and human rights principals.”
The Haqqani group is fighting US-led NATO forces and the Afghan government.
Shop owner Mohammad Haroon said of the bombing: “I’ve never seen such a powerful explosion in my life,” adding all the windows in his store and others nearby were shattered.
The Taliban and Islamic State have carried large-scale assaults in the capital in the past, though a Taliban spokesman denied it was behind the latest atrocity and condemned the blast.
Afghanistan has seen a rise in violent attacks this year, as the Taliban pushes to overthrow the US-backed government and reimpose Islamic law 16 years after it was removed from power following the 9/11 attacks.
Since the withdrawal of most international troops in 2014, the extremists have gained ground and now control about 40% of the country, according to US estimates.
However, President Ashref Ghani’s government still holds all the main provincial centres.
There are currently 8,500 US troops in Afghanistan and Donald Trump is due to decide soon on a recommendation to send 3,000 to 5,000 more soldiers to bolster the NATO training force and US counter-terrorism mission.
The commander of US forces in Afghanistan, General John Nicholson, told a congressional hearing earlier this year that he needed several thousand more troops to help Afghan forces break a “stalemate” with the Taliban.