The Afghan Taliban denied responsibility for a vehicle bomb attack in Kabul on Wednesday that killed at least 80 people and wounded more than 350.

Taliban spokesman Zabihullah Mujahid said in a statement the movement's fighters had no involvement and the movement condemned any such untargeted attacks that caused civilian casualties.

Islamic State, the other main militant group active in Afghanistan, has carried out high profile attacks in Kabul, including an attack on a military hospital in March that killed more than 50 people.

A powerful bomb hidden in a sewage tanker exploded in the morning rush hour in the centre of the Afghan capital on Wednesday, police said, killing at least 80 people, wounding hundreds and damaging embassy buildings.

The victims appeared mainly to have been Afghan civilians.

The bomb, one of the deadliest in Kabul and coming at the start of the holy month of Ramzan, exploded close to the fortified entrance to the German embassy, killing a security guard and wounding some staff, German Foreign Minister Sigmar Gabriel said on Twitter.

“Such attacks do not change our resolve in continuing to support the Afghan government in the stabilisation of the country," he said.

Basir Mujahid, a spokesman for city police, said the explosives were hidden in a sewage tanker. He suggested that the German embassy might not have been the target of the blast, which sent clouds of black smoke into the sky near the presidential palace.

"There are several other important compounds and offices near there too," he told Reuters.

The blast, which shattered windows and blew doors off their hinges in houses hundreds of metres away, was unusually strong.

The Nato-led Resolute Support (RS) mission in Kabul said Afghan security forces prevented the vehicle carrying the bomb from entering the heavily protected Green Zone that houses many foreign embassies as well as its headquarters, also suggesting it may not have reached its intended target.

A public health official said at least 80 people had been killed and more than 350 wounded.

Germany cancelled a planned flight deporting migrants to Afghanistan after the blast, its ARD broadcaster said, citing the interior minister. Germany began carrying out group deportations of Afghans in December, seeking to show it is tackling the high number of migrants by getting rid of those who do not qualify as refugees.

The French, Turkish and Chinese embassies were among those damaged, the three countries said, adding there were no immediate signs of injuries among their diplomats. The BBC said one of its drivers, an Afghan, was killed driving journalists to work. Four journalists were wounded and treated in hospital.

Video shot at the scene showed burning debris, crumbled walls and buildings, and destroyed cars, many with dead or injured people inside.

"Felt like an earthquake"

At the Wazir Akbar Khan hospital a few blocks away, there were scenes of chaos as ambulances brought in wounded and frantic relatives scanned casualty lists and questioned hospital staff for news.

"It felt like an earthquake," said 21-year-old Mohammad Hassan, describing the moment the blast struck the bank where he was working. His head wound had been bandaged but blood still soaked his white dress shirt.

Another lightly wounded victim, Nabib Ahmad, 27, said there was widespread destruction and confusion.

"I couldn't think clearly, there was a mess everywhere," he said.

Frenzy erupted out outside the hospital as ambulances and police trucks began bringing in the bodies of those killed. Some bodies were burned or destroyed beyond recognition.

Pakistan and India condemned the blast.

“Pakistan strongly condemns the attack that also caused damage to the residences of some Pakistani diplomats and staff, living in the close vicinity, and inflicted minor injuries to some,” Foreign Office spokesman Nafees Zakaria said in a statement.

"India stands with Afghanistan in fighting all types of terrorism. Forces supporting terrorism need to be defeated," Indian Prime Minister Narendra Modi said in a tweet. India said its embassy staff were safe.

Wednesday's attack provided another clear demonstration that Ramzan, which began at the weekend, would provide little respite from the violence across Afghanistan.

The Taliban have been stepping up their push to defeat the US-backed government. Since most international troops withdrew at the end of 2014, the Taliban have gained ground and now control or contest about 40 per cent of the country, according to US estimates, though President Ashraf Ghani's government holds all provincial centres.

US President Donald Trump is due to decide soon on a recommendation to send 3,000 to 5,000 more troops to bolster the small Nato training force and US counter-terrorism mission now totalling just over 10,000.

The commander of US forces in Afghanistan, General John Nicholson, told a congressional hearing this year that he needed several thousand more troops to help Afghan forces break a "stalemate" with the Taliban.