The attack, which was carried out with a car loaded with explosives, took place in front of the embassy, which is adjacent to a US military base, a UN office building and some 200 meters (650 feet) from the presidential palace, officials said.

One US soldier was killed and six wounded a spokesman for US forces in Afghanistan said, correcting pervious reports of two soldiers being killed and 12 wounded.

A spokesman for the German foreign ministry in Berlin said that several employees of the embassy were among the injured, although did not give further details.

German Chancellor Angela Merkel said she was "horrified" by what she called "a terrorist act committed in contempt of human life." She also said Germany "would continue to maintain its commitment in Afghanistan," according to a statement.

German Foreign Minister Frank-Walter Steinmeier also condemned the bombing as a "cowardly and barbaric act."

"We are not going to be deterred by terror from continuing our aid to the Afghan people," he said. "It is not terrorism and violence that are the future of Afghanistan but security and democracy."

The attack happened on a well-travelled civilian road, according to US military spokesman Col. Jerry O'Hara.

"This incident will only strengthen our collective resolve to aggressively pursue enemy networks before they can hurt innocent Afghans and Coalition forces," he added.

Taliban claims responsibility

The Taliban took responsibility for Saturday's bombing in a statement posted on the rebel Web site and said that one of their bombers, named Sham-ul-Rahman, carried out the attack using a Toyota Corolla car filled with explosives.

The statement claimed that eight German soldiers were killed in the attack, while several German diplomats were among the casualties. The blast destroyed part of the German embassy building, according to the Taliban's statement.

The blast blew out windows at the nearby US base, but military spokesman Lt. Col. Christian Kubik told the AFP news agency there was no significant damage.

The Taliban are known to provide different accounts of their operations, which are often proven to be exaggerated or falsified.

Several vehicles including a passenger van and tanker in front of the embassy's gate were ablaze and thick smoke was billowing from the area on Saturday. Tolo, a private TV channel, showed several Afghan municipal workers soaked in blood being rushed from the scene.

The area, which is one of the city's main intersections, was cordoned off by Afghan and US military soldiers.

Taliban militants, who were driven out of power in a US-led invasion in late 2001, have carried out hundreds of suicide attacks in the past seven years.

The militants were responsible for more than 120 suicide bombings in 2008 in Afghanistan. More than 50 people including two Indian diplomats were killed in a suicide attack against the Indian embassy in July last year.