A Taliban suicide bomber targeted a NATO convoy in downtown Kabul Sunday, triggering a powerful explosion in a rush-hour attack that comes just days after the resurgent militant group overran a key northern city.

No casualties were immediately reported from the bombing, which sent a thick plume of smoke rising into the sky, as the Taliban ramp up attacks on government and foreign targets.

Security officials cordoned off the area as ambulances with wailing sirens rushed to the scene, which was littered with the mangled wreckage of vehicles, according to an AFP photographer.

"The explosion occurred in the Joy Shir area of Kabul city. It was a suicide attack targeting a foreign forces convoy," Kabul police spokesman Ebadullah Karimi told AFP.

Interior ministry spokesman Sediq Sediqqi said there was no word so far on any casualties.

A NATO spokesman in Kabul confirmed that their convoy came under attack but said the international coalition was still gathering further information.

The Taliban were behind the bombing, the group's spokesman Zabihullah Mujahid told AFP.

"A convoy of foreign forces came under martyrdom attack by our mujahideen in Joy Shir area of Kabul city. Two of their vehicles were damaged and all aboard the vehicles were killed," he said.

The Taliban, toppled from power in a 2001 US-led invasion of Afghanistan, are known to exaggerate battlefield claims.

The emboldened insurgents have stepped up attacks around Afghanistan since they launched their annual summer offensive in late April.

The militants overran the strategic northern city of Kunduz in late September, in their most spectacular victory in 14 years.

The capture of the provincial capital for three days marked a stinging blow for Western-trained Afghan forces, who have largely been fighting on their own since the end of NATO's combat mission in December.

The government claims to have wrested back control of the city but sporadic firefights continue with remnant pockets of insurgents as Afghan soldiers, backed by NATO special forces, conduct clearance operations.

As fighting spreads in neighbouring Badakhshan, Takhar and Baghlan provinces, concerns are mounting that the seizure of Kunduz was merely the opening gambit in a new, bolder strategy to tighten the insurgency's grip across northern Afghanistan.

Most NATO combat troops pulled out of Afghanistan last year but a small contingent focused on training and counter-terrorism operations remains, including roughly 10,000 American soldiers.

NATO forces are themselves under fire after a US air strike on October 3 pummelled a hospital in Kunduz run by Doctors Without Borders (MSF), killing 12 staff and 10 patients.

The medical charity shut down the trauma centre, branding the incident a war crime and demanding an international investigation into the incident, which sparked an avalanche of global condemnation.

President Barack Obama has apologised over the strike, with three different investigations -- led by NATO, US forces and Afghan officials -- currently under way.

The Pentagon announced Saturday it would make compensation payments to those killed and injured in the strike.