At least 95 people were killed and 158 others wounded when an ambulance packed with explosives blew up in a crowded area of Kabul on Saturday, the public health ministry said.
The attack was claimed by the Taliban, though an interior ministry spokesman blamed the Haqqani network, a militant group affiliated with the Taliban.
US President Donald Trump condemned the bombing as “despicable” and called on the world to act against the fundamentalist group.
“The Taliban’s cruelty will not prevail,” Mr Trump said in a statement released by the White House. “Now, all countries should take decisive action against the Taliban and the terrorist infrastructure that supports them.”
The casualty toll in Saturday's bombing is the worst in Kabul since 150 people were killed in a truck bomb explosion in May last year near the German embassy, prompting a major reinforcement of security in the Afghan capital.
The latest attack comes just days after an assault on the Intercontinental Hotel, one of the most prominent hotels in the city, killed more than 20 people. That was also claimed by the Taliban
As medical teams struggled to handle the casualties pouring in on Saturday, some of the wounded were laid out in the open, with intravenous drips set up next to them in hospital gardens.
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"It's a massacre," said Dejan Panic, coordinator in Afghanistan for the Italian aid group Emergency, which runs a nearby trauma hospital that treated dozens of wounded.
The latest attack will add pressure on president Ashraf Ghani and his US allies, who have expressed growing confidence that a new more aggressive military strategy has succeeded in driving Taliban insurgents back from major provincial centres.
The United States has stepped up its assistance to Afghan security forces and increased its air strikes against the Taliban and other militant groups, aiming to break a stalemate and force the insurgents to the negotiating table.
But the Taliban have dismissed suggestions they have been weakened by the new strategy, and the past week has shown that their capacity to mount deadly, high-profile attacks is undiminished, even in the heavily protected centre of Kabul.
The US-led international force in the country on Saturday vowed its support for the Afghan government and armed forces in their "difficult and dangerous work", adding that none of its members had been killed or wounded in the blast.
Mirwais Yasini, a member of parliament who was nearby when the explosion occurred, said an ambulance approached the checkpoint and blew up. The target was apparently an interior ministry building nearby.
Buildings hundreds of metres away were shaken by the force of the blast, which left torn bodies strewn on the street amid piles of rubble, debris and wrecked cars.
The streets were full when the blast went off at around lunchtime in a busy part of the city near a number of foreign embassies and government buildings.
With much of central Kabul now a heavily fortified zone of high concrete blast walls and police checkpoints since the bombing last May, there were angry questions about how the attacker had been able to set off the blast so close to embassies and government buildings.
Interior ministry deputy spokesman Nasrat Rahimi said the attacker had successfully passed at least one police checkpoint.
"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 [up] his explosive-laden car," said Mr Rahimi.
People helped walking-wounded away as ambulances with sirens wailing inched their way through the traffic-clogged streets of the city centre.
"I was sitting in the office when the explosion went off," said Alam, an office worker whose head was badly cut in the blast.
"All the windows shattered, the building collapsed and everything came down."
The Swedish and Dutch embassies as well as the European Union mission and an Indian consular office are also near the scene of the attack but there were no reports that any of their staff had been hurt.