The US Pentagon says it happened near the Abbey Gate - where American and British forces have been stationed.
Initial reports suggest there were two explosions and gunfire.
It comes after warnings of a possible terrorist attack by Islamic State militants.
Countries including Ireland have been trying to evacuate citizens and visa-holders still in Kabul.
Sky's Stuart Ramsay says it's likely to speed up the withdrawal of western troops:
"The risk will not go away, it will actually increase. And we already know that some countries had already said, the risk is too high and we're withdrawing anyway. That could be the end of it, it is a hugely significant event because of that alone, days earlier than the expected withdraw."
