The explosion -- one of the biggest since a truck bomb ripped through the Afghan capital's diplomatic quarter on May 31 last year -- triggered chaotic scenes as terrified people fled the area where several high-profile organisations, including the European Union, have offices.
"The latest toll from Kabul hospitals stands at 40 martyred and 140 wounded," health ministry spokesman Waheed Majroh told AFP.
The force of the blast shook windows of buildings at least two kilometres (more than a mile) away and shattered windows within hundreds of metres of the site.
Some low-rise structures in the vicinity of the explosion also collapsed.
"The suicide bomber used an ambulance to pass through the checkpoints. He passed through the first checkpoint saying he was taking a patient to Jamuriate hospital and at the second checkpoint he was recognised and blew his explosive-laden car," interior ministry deputy spokesman Nasrat Rahimi told AFP.