Five Indians, including a Brigadier-rank defence attache and an IFS officer, were killed in the suicide attack.

India is rushing a high-level team, headed by Nalin Surie, Secretary (West) in the Ministry of External Affairs, to Kabul to assess the "emergency" situation there.

Defence Attache Brigadier R D Mehta and Counsellor Venkateswara Rao were killed when the suicide bomber targeted the Embassy early Monday morning, External Affairs Minister Pranab Mukherjee told reporters in New Delhi.

The two other two Indians killed in the attack were identified as ITBP personnel Ajai Rathore and Roop Singh.

A fifth employee of the Indian Embassy Niamutullah, killed in the blast, was a local Afghan.

The Taliban have vowed to step up their campaign of suicide bombings this year, graphically demonstrating that despite the increase in foreign troops in Afghanistan and more trained Afghan forces on patrol, the militants are far from defeated.

"I saw wounded and dead people everywhere on the road," said Danish Karokhil, the head of the independent Pajhwok news agency, whose offices are close by.

"The target was the diplomatic vehicles. They were trying to get inside the embassy when the suicide car bomber attacked them," he said.

Health Ministry spokesman Abdullah Fahim said 28 people were killed and 141 wounded, but a senior police official later revised this to 41 dead.

"More than 10 people are in a very critical condition. At least one woman and one baby were killed. At least three babies were wounded and women, children, military personnel and civilians are among the casualties," Fahim said.

The two embassy vehicles were destroyed by the blast, but it was not clear if those inside were among the casualties. India has close relations with the Afghan government and is funding and building a number of large infrastructure projects, but had no diplomatic ties to the Taliban when they ruled the country.

INDIA CONDEMNS

The gates of the embassy were blown off and the walls and buildings inside the compound were also damaged by the force of the blast, said an Indian diplomat who declined to be named.

"We fear that there may be casualties among our personnel and are ascertaining full details," the Indian Foreign Ministry said in a statement.

"The government of India strongly condemns this cowardly terrorist attack on its diplomatic mission in Afghanistan. Such acts of terror will not deter us from fulfilling our commitments to the government and people of Afghanistan," India said.

Security guards, a line of people waiting for visas and those shopping at a nearby market were likely the main victims.

Two women were among five dead at Kabul's Emergency Hospital. One of the dead women had a baby with her at the time of the blast, the woman's sister said. The baby was now missing.

Grey smoke and dust poured from the scene of the blast. Police cordoned off the area as ambulance crews raced the wounded to hospital. Several US soldiers were also at the scene.

US troops later shot dead the driver of another car and wounded a passenger, witnesses said. US military vehicles were driving through the city at high speed after the bombing, soldiers shouting angrily at drivers to get out the way.