According to the security sources, the incident took place in Police District 17th of the city close to Kotal-e-Khariana Khana area.
The sources further added that a magnetic bomb planted in a vehicle went off, leaving at least four civilians dead or wounded.
According to the security sources, at least one civilian was killed and three others were wounded in the explosion.
However, another security source said at least three civilians, all children, were killed and a security guard of an official was wounded in the explosion.
No group including the Taliban insurgents has so far claimed responsibility behind the incident.
This comes as a coordinated suicide attack rocked Kabul city on Monday, leaving at least two people dead and some others wounded.
The incident took place in the vicinity close to Ansari Square of the city after two suicide bombers and some insurgents belonging to the ISIS affiliates stormed the Iraqi embassy.