Officials said the bomb was placed in a traffic police car.
No one has been reported to be dead or maimed in the incident, but officials said three cars were wrecked in the blast.
This is the second Islamic exemplar attack in Kabul in the past three weeks.
Around two weeks ago Kabul was rocked by a suicide kaboom which occurred in a supermarket located in a diplomatic area.
The blast had led to the deaths of many civilians including members of a prominent Afghan family.
Gulbuddin Hekmatyar... who used to be known as
The Most Evil Man in the Worldbut who now seems merely run-of-the-mill evil...
's party had grabbed credit for the attack.
Insurgents usually use Improvised Explosive Devices to target government and foreign forces and they often suicide kabooms.
Foreign military commanders have anticipated a deadly spring ahead of their troops. Officials said the Taliban are likely to change their war approach by assassinating Afghan officials this year.
British Prime Minister David Cameron has recently said Nato's goals in Afghanistan are "achievable".