Several shops and houses were reportedly flattened by the force of theblast.

Officials gave conflicting initial information about the cause.

A police spokesman said the explosion had been caused by gunpowder ignitedin shops selling ammunition.

However another senior police officer said it was a car bomb. Some reportsmention suicide bombers.

The explosion occurred at about 0630 (0200 GMT), when most of the shops wereclosed in this usually busy area of the capital. It destroyed a row ofmud-brick shops and left a 3m (10ft) crater, an AFP reporter at the scene said.

 "We heard a huge explosion from one of the shops. There werepeople in most of the shops. There are still bodies underneath therubble," said Ahmad Fahim, who runs a local bakery.

At least three wounded people were pulled from beneath the rubble. People atthe scene are digging with their hands and shovels in a search for morecasualties.

The Afghan capital was rocked by a series of explosions in 2006, includingseveral suicide bombings, but has not seen any attacks this year.

AFP / BBC