Officials said there were no immediate reports of casualties from the explosion, which was strongly felt across downtown Kabul and blew out window panes of homes.
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A small group of gunmen tried unsuccessfully to break into the consulate late on Sunday and shut themselves into the house but security forces halted operations overnight and were proceeding cautiously to minimise civilian casualties.
An Indian official, who was hunkered down in a secure area within the diplomatic enclave, said all consulate employees were safe. The Taliban claimed responsibility for the attack.
Violence has increased in the Afghan capital over recent days, blamed on the Taliban.
According to Danish, the bomber’s target was a convoy of foreign troops passing through the area.
“Fortunately only the attacker was killed”, he added, clarifying an earlier ministry statement that the bomber was on foot.
Afghanistan has had a tense and violent start to the new year, as talks to revive the peace process loom next week.
Earlier, Indian consulate in Afghanistan attacked by the militants.
“The vehicle bomb detonated at the gate of Camp Baron on the military side of Kabul airport”, a spokesperson for the Ministry of Interior Sediq Sediqqi confirmed.
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Islamabad is set to host a first round of dialogue between Afghanistan, Pakistan, the USA and China on January 11 to lay out a comprehensive roadmap for peace.
