Dozens of fatalities were reported and over 150 people were injured when a water tanker loaded with explosives went off in downtown Kabul near the German embassy on Wednesday morning. All Indian Embassy staff are safe, authorities said.

"Hospital sources say dozens killed and more than 150 wounded in Kabul blast," Pajhwok Afghan News agency reported.

Tolo News quoted Wazir Akbar Khan hospital as saying that two people were so far killed. 

Tolo also quoted the interior ministry as saying that a "water tanker had been laden with explosives that were detonated on Wednesday".

According to NATO, a massive explosion occurred near the German Embassy at 8.22 a.m. near the NATO Resolute Support headquarter in Kabul.

Foreign troops have arrived at the scene.

Images circulating on social media showed a large plume of black smoke over the city.

The blast occurred during rush hour traffic. It ripped through the diplomatic zone causing widespread damage.

There was substantial damage to buildings in the explosion near Zanbaq Square in downtown Kabul.

It said the victims are mostly civilians and a large number of them are from the Roshan mobile company.

All staff in the Indian Embassy are safe but some windows in the building were damaged.

"By God's grace, Indian Embassy staff are safe in the massive #Kabul blast," External Affairs Minister Sushma Swaraj tweeted.