According to Basir Mujahid, a spokesman for the Kabul police, riot police were deployed to the area after protests turned violent, only to be hit by the suicide bomber.
Reportedly, the victims were mostly police personnel.
More details are awaited.
A suicide bomber killed six civilians in a Christmas Day attack near an Afghan intelligence agency compound in the city, which was also claimed by IS.
Among the 18 wounded were 16 officers and two civilians, deputy interior ministry spokesman Nasrat Rahimi told reporters.
At least 11 people were killed and 20 others injured in a suicide bomb attack in Microryan neighborhood of Afghanistan's capital of Kabul Thursday night, a health official said.
On Thursday, the shopkeepers took to the streets in protest, alleging that the police had killed one of them.
If eyewitnesses are to be believed, it was a suicide attack. The deadliest bombing occurred last week, leaving more than 40 people dead and around 90 others wounded.
No individual or group has yet claimed responsibility behind the attack.
The Islamic State has a regional affiliate in Afghanistan, and has claimed a string of attacks in Kabul in recent weeks, including one on a Shiite cultural center last week that claimed almost 50 lives.
The casualties have been confirmed by Kabul Police.
Security forces have cordoned off the area for precautionary measures.
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