Omar Zwak, spokesman for the provincial governor, said at least 20 people had been killed and more than 50 wounded, including members of the police and army, civilians and staff of the New Kabul Bank branch where the attack took place, Reuters reported.
No group has immediately claimed responsibility for the attack.
In a similar incident last month, at least three people lost their lives and more than 30 others sustained injuries in the eastern city of Gardez, the capital of Paktia Province.