The incident has taken place in the vicinity of the third police district of the city with the eyewitnesses saying a Toyota Corolla type vehicle was targeted.
A source in the 3rd Police District police station confirmed the incident and said the explosion has not incurred any casualties.
However, the eyewitnesses are saying that two people were injured after a magnetic bomb planted in the vehicle went off in the vicinity close to Pul-e-Surkh area.
No individual or group has so far claimed responsibility behind the incident.
This comes as a group of insurgents including two suicide bombers belonging to the ISIS terrorist group launched a coordinated attack on the Iraqi embassy in Kabul city on Monday.
The attack lasted for almost four hours before the Afghan security forces manage to gun down the remaining insurgents, leaving at least two people dead and three others wounded.
A suicide attack also took place on the NATO convoy in Qarabagh district of Kabul province late on Thursday evening, leaving three people dead, including a Georgian soldier and two Afghan civilians.