The explosion sparked a fireball and littered the street with shrapnel and twisted metal hulks. Heavy black smoke poured from burning wreckage at the site along the four-lane highway frequently used by foreign military trainers in the southwestern section of the city.
Underscoring the difficulties ahead, the brazen assault occurred on the same day that top NATO and Afghan officials were meeting elsewhere in Kabul to discuss the second phase of shifting security responsibilities to Afghan forces in all or part of 17 of the country's 34 provinces.
It also was a blow to efforts by the U.S. and President Hamid Karzai to forge peace with the fundamentalist Taliban movement as NATO plans to withdraw all its combat troops from the country by the end of 2014, with support for the costly war reaching new lows in the West.
NATO said five coalition service members and eight civilian contractors working for the coalition died in the explosion.
A U.S. official said all were Americans, but Canadian defense spokesman, Lt. Col. Christian Lemay, told The Associated Press that a Canadian soldier was among the troopers killed.
The Afghan Ministry of Interior said three Afghan civilians and one policeman also died in the attack. Eight other Afghans, including two children, were wounded, said Kabir Amiri, head of Kabul hospitals.
Kabul has increasingly been targeted by attacks in recent years, with many blamed on the Haqqani network, an al-Qaida and Taliban-linked movement that operates out of Pakistan. But NATO already has shifted security responsibilities for the capital to the Afghans and foreign forces have little presence on the streets.
A similar Taliban attack targeted a NATO convoy on the same road in May 2010, when a suicide bomber struck a convoy, killing 18 people. Among the dead were five American troops and a Canadian colonel. But Saturday's strike was the deadliest since the decade-long war began.
The Taliban said the bomber, Abdul Rahman, was driving a Toyota Land Cruiser SUV containing 1,540 pounds (700 kilograms) of explosives and targeting foreigners providing training for Afghan police. The Taliban, who frequently exaggerate casualty claims, said that 25 people were killed by the blast.
The Taliban also claimed responsibility for another suicide bombing outside a government intelligence office in the northwest province of Kunar in which only the bomber was killed. In all, there were three attacks against NATO and Afghan forces, killing at least 21 people.
Elsewhere, a man wearing an Afghan military uniform opened fire on a joint NATO-Afghan base, killing three Australian service members in Uruzgan province, an area in the restive south that is traditionally viewed as the Taliban's stronghold, according to the Australian Broadcasting Corp.
Afghan Defense Ministry spokesman Mohammad Zahir Azimi said officials were investigating whether the shooter, who was killed in the incident, was a member of the Afghan army or a militant wearing an army uniform.
In Kabul, the armored personnel carrier, known as a Rhino, was sandwiched between of a convoy of mine-resistant military vehicles traveling on the road, a major artery leading to the landmark Darulaman Palace, the bombed-out seat of former Afghan kings. The attack occurred near the entrance of the American University.
NATO and Afghan forces sealed off the area as fire trucks and ambulances rushed in. An AP reporter at the scene saw two NATO helicopters landing to airlift casualties, while coalition troops using loudspeakers ordered bystanders to evacuate the area.
One witness, Noor Ahmad, said he saw a coalition soldier choking inside the burned bus.
"The bottom half of his body was burned," Ahmad said.
Coalition troops were seen carrying three black body bags from the burned wreckage and one charred body on a stretcher toward the waiting helicopters.
It was the deadliest single attack against the U.S.-led coalition across the country since the Taliban shot down a NATO helicopter on Aug. 6 in an eastern Afghan province, killing 30 U.S. troops, most elite Navy SEALs, and eight Afghans.
The most recent attack in Kabul occurred on Sept. 20, when an insurgent with a bomb hidden in his turban assassinated former Afghan President Burhanuddin Rabbani. The insurgent was posing as a peace emissary coming to meet Rabbani, who was leading a government effort to broker peace with the Taliban. Afghan officials blame the Haqqani for that incident.
Earlier Saturday, a female suicide bomber blew herself up as she tried to attack a local government office in the capital of Kunar province, a hotbed of militancy in northeast Afghanistan along the Pakistan border.
Abdul Sabor Allayar, deputy provincial police chief, said the guards outside the government's intelligence office in Asad Abad became suspicious of the woman and started shooting, at which point she detonated her explosives.
Afghan and U.S.-led coalition forces conducted operations earlier this month, killing more than 100 insurgents in an effort to curb violence in rugged areas of Kunar where the coalition and Afghan government have a light footprint.