Officials were trying to determine the exact location of the explosion and there were no immediate reports of casualties, Kabul police spokesman Abdul Basir Mujahid told AFP.
An interior ministry spokesman said the blast was caused by a car bomb. Earlier today, a suicide bomber struck a street leading to Kabul's international airport, but no casualties were reported.
No group immediately claimed responsibility for the bombings. The bombing mark the latest assaults on the war-scarred Afghan capital. A Taliban suicide car-bomber struck a French restaurant popular with foreigners in Kabul on Friday, killing two people in a New Year's Day attack.
Fifteen others were wounded in the attack on Le Jardin, an Afghan-owned eatery, which caused a piercingly loud explosion and left a building engulfed in flames.
The spike in violence coincides with a renewed international push to revive peace talks with the resurgent Taliban. Islamabad is set to host a first round of dialogue between Afghanistan, Pakistan, the US and China on January 11 to lay out a comprehensive roadmap for peace.
Pakistan, which wields considerable influence over the Afghan Taliban, hosted a milestone first round of talks in July but the negotiations stalled when the insurgents belatedly confirmed the death of long time leader Mullah Omar.