The incident took place at a parking lot near s police station in Kandahar. The bomber is reported to have been riding an explosives-laden motorcycle.
A spokesman for the interior ministry has said the victims include both civilians and law enforcement personnel.
According to the local hospital staff, some of the wounded are in a critical condition.
In recent months dozens of people have been killed in 14 terrorist attacks in southern and eastern Afghanistan. A Canadian diplomat was killed in a suicide bomb attack in Kandahar January 15.
Next day a suicide bomber drove his motorcycle into a crowd in the town of Spin Boldak in the Kandahar Province, killing 2 people.
The upsurge of terrorist attacks has been caused by the NATO's decision to expand the international peacekeeping contingent in Afghanistan (ISAF) in the south of the country where the "Taliban" movement and "Al-Qaeda" are particularly active.