A suicide car bomb targeting India's embassy in Kabul, Afghanistan has left at least 41 people dead and nearly 150 others wounded.

Officials say Monday's incident is the deadliest in Kabul so far this year and since the Taliban were pushed from power in late 2001.

"This is what we're facing today -- an escalation," Omar Samad, Afghanistan's ambassador to Canada, told CTV Newsnet on Monday.

"I think the upcoming year is going to be treacherous and dangerous for all of us involved with bringing peace and stability to Afghanistan."

India is a major contributor to Afghanistan's reconstruction, he said.

The bomb -- which detonated about 8:30 a.m. local time -- knocked down a wall, damaged two embassy vehicles and destroyed several nearby shops.

India's foreign minister said from New Delhi that four Indians, including the military attache and a diplomat, died in the blast.

Five Afghan guards at the nearby Indonesian embassy also died.

"Several shopkeepers have died. I have seen shopkeepers under the rubble," said Ghulam Dastagir, a shopkeeper wounded in the blast.

Afghan men line up outside the embassy by the dozens every morning to apply for visas. At least two children are believed to have died in the blast.

President Hamid Karzai blamed the attack on militants trying to rupture the friendship between India and Afghanistan.

India's Minister of External Affairs said the attack would not stop India from "fulfilling our commitments to the government and people of Afghanistan."

India's ambassador and his deputy were not inside the embassy when the attack happened, said an Afghan foreign ministry spokesperson.

Taliban denies responsibility

No group has taken responsibility for the attack, and a Taliban spokesman denied involvement.

"Whenever we do a suicide attack, we confirm it," said Zabiullah Mujahid. "The Taliban did not do this one."

Some observers note the Taliban rarely claims credit for attacks in which Afghan civilians die.

"It really doesn't matter what the Taliban said," Samad said. "What is clear to the Afghan people is that we have enemies at the regional level beyond Afghanistan's borders. They are trying to undermine our relations with India. They are also trying to undermine our relations with Pakistan's elected government."

This threat is "very serious," he said.

Afghanistan's interior minister hinted that Pakistan's intelligence service may have had a role, saying, "Terrorists have carried out this attack in co-ordination and consultation with some of the active intelligence circles in the region."

Militants have frequently attacked Indian offices and projects in Afghanistan. Many Taliban are linked to Pakistan, which itself views Indian influence over Afghanistan with alarm. Pakistan supported the Taliban regime in the 1990s.

Pakistan's foreign minister said his country condemned this act and all terrorism.

The Indian embassy had beefed up its security in recent weeks, creating dirt-filled blast walls to protect against bombings. It is very near the Afghan interior ministry offices, which were targeted by a suicide bomber in September 2006. Security in the neighbourhood was stepped up after that attack.

Other attacks

Monday's attack is the sixth suicide bombing in Kabul so far this year, which also saw major security incidents:

January's attack on the Serena hotel, a popular spot for Westerners

An April attack on a parade marking the anniversary of the end of the Soviet occupation

"It's a very discouraging sign when this sort of stuff happens in the capital," Canadian Press reporter Alexander Panetta told Canada AM Monday from Kandahar.

"All the indicators you get from Afghanistan, at least the statistical ones, don't seem very good. The number of attacks are up, suicide bombings are up exponentially, the number of civilian deaths are up. Everything just seems to be increasing, at least on the negative side of the ledger."

There were other bombings Monday in Afghanistan:

A roadside bomb killed four police on patrol in Uruzgan province and wounded seven others.

A roadside bomb killed three police officers in Kandahar province's Zhari district and wounded three others.

Panetta said an Afghan legislator was gunned down in Zhari district on the weekend.

Canada lost its 87th soldier since 2002 when Pte. Colin Willmot died in an explosion while on foot patrol in the Panjwaii district of Kandahar province on Sunday.

With files from The Associated Press