A bomb hidden in an ambulance has killed at least 95 people and wounded around 158 others when it blew up in an area of the Afghan capital Kabul near foreign embassies and government buildings.

The Taliban claimed responsibility for the blast, a week after it claimed an attack on the Intercontinental Hotel in the city in which more than 20 people were killed.

"It is a massacre," said Dejan Panic, Afghan coordinator for the Italian aid group Emergency, which runs a nearby hospital. In a message on Twitter, the group said more than 70 wounded had been brought in to that hospital alone.

Saturday is a working day in Afghanistan, and the blast tore through a crowded street in a busy part of the city at lunchtime.  

   

Mirwais Yasini, a member of parliament who was nearby when the explosion occurred, said the ambulance approached a checkpoint close to an office of the High Peace Council and several foreign embassies, and blew up.

Buildings hundreds of metres away were shaken by the force of the explosion, which left torn bodies strewn on the street nearby amid rubble and debris.

People helped walking-wounded away as ambulances with sirens wailing inched their way through the traffic-clogged streets of the city centre.

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The latest attack will add pressure on President Ashraf Ghani and his U.S. 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.

However, the Taliban have dismissed suggestions that they have been weakened by the new strategy and the latest attacks have demonstrated that their capacity to mount deadly, high-profile attacks remains undiminished.