The thundering explosion occurred just after nightfall in a district that includes U.N. facilities and an Afghan intelligence office. The force of the blast shattered windows around the city and sent flames shooting into the sky.
So many houses and nearby buildings had collapsed that officials feared the death toll could rise further. At least 66 people were wounded, said Gen. Ghulam Ali Wahabat, a police commander in charge of southern Afghanistan.
"There was big smoke in the sky, and there were many dead bodies," said Mohammad Ismail, a vegetable seller being treated at the hospital for leg and hand injuries from the blast. "Some of the wounded were crying out."
It appeared the main target was the Japanese companyf that is involved in reconstruction efforts in the southern Afghan city. The company recently took over a contract to build a road that insurgents had stalled for several months.
An intelligence office is about 400m from the attack site and a UN office is located about 800m away.
"The staff is good, everybody is safe," said Samad Khaydarov, head of the UN Assistance Mission in Afghanistan. "Our office, our guesthouses, are safe. ... Unfortunately, security is not so good in Kandahar."
No one immediately claimed responsibility for the attack.
The blast in the center of the city was one of the largest since the Taliban were expelled from the country in 2001. It destroyed about 40 shops, including restaurants and bakeries.
"Once again they've killed children, women, innocent Afghans. They are not human. They are animals. You can see for yourself the destruction of this enemy," said deputy provincial police chief Mohammad Sher Shah.
The exact mechanism of the bombing was still being determined.
Provincial council member Haji Agha Lalai said five vehicles filled with explosives detonated together, causing the massive blast. But Shah said the vehicles used were an oil tanker filled with explosives and two car bombs.
Kandahar is the spiritual home of the Taliban, and the militants have carried out several complex attacks here in the last several years. A large NATO base sits on Kandahar's outskirts, but militants control districts immediately to the city's west.
In other violence, a bomb blast killed four US troops in southern Afghanistan on Tuesday, said military spokeswoman Lt. Cmdr. Christine Sidenstricker. No other information was released pending the notification of family members.
The deaths bring to 41 the number of US troops killed in Afghanistan this month, the second deadliest month in the country since the 2001 US invasion. Last month a record 44 US troops died.
This year has been the deadliest of the war for US troops. Including the latest deaths, at least 172 American forces have died in the Afghan war this year, according to an Associated Press count.
The number of overall NATO deaths this year is a record as well: at least 292. Last year 286 died, according to the AP count.
The US has more than 60,000 troops in the country.
