At least 80 people were killed and more than 230 wounded on Saturday when attackers detonated explosives amid a huge crowd of peaceful protesters in the Afghan capital, most of them from the country's Shiite ethnic Hazara minority, Afghan officials said.

Spokesmen for the Islamic State quickly claimed responsibility for the attack at a traffic circle jammed with demonstrators, according to Afghan media.

The group's media office said two ISIS fighters detonated suicide belts among the crowd, in two separate bombings.

The death toll was the highest of any terror attack in the capital after more than a decade of fighting between Taliban militants and Afghan and NATO forces.

If indeed carried out by the Islamic State, known as DAESH in Afghanistan, it would be the first major urban attack in Afghanistan by the radical Sunni Muslim terrorist group and could signal its first deliberate effort to target the country's Shiite minority, which it views as infidel.

Graphic television footage from the site of the attack showed many dead bodies lying on the bloodied road, close to where thousands of Hazara had been demonstrating over the route of a planned multimillion dollar power line.

"Two fighters from Islamic State detonated explosive belts at a gathering of Shi'ites in the city of Kabul in Afghanistan," said a brief statement on the group's Amaq news agency.

The explicit reference to the Hazara's Shia religious affiliation also represents a menacing departure for Afghanistan, where the bloody rivalry between Sunni and Shia typical of Iraq has been relatively rare, despite decades of war.

The Persian-speaking Hazaraare Afghanistan's third-largest minority but they have long suffered discrimination and thousands were killed under Taliban rule.

The Taliban, a fierce enemy of Islamic State, had issued a statement denying any involvement.

"We would never take part in any incident that divides the Afghan people," Taliban spokesman Zabihullah Mujahid said.

The attack succeeded despite tight security which saw much of the city centre sealed off with stacks of shipping containers and other obstacles and helicopters patrolling overhead.

It was the deadliest bombing seen in Kabul since April, when more than 60 people were killed in an attack on offices used by the security services.

That was considered the worst single incident of its kind in Kabul since 2011.

Saturday's demonstrators had been demanding the 500 kV transmission line from Turkmenistan to Kabul be rerouted through two provinces with large Hazara populations, an option the government says would cost millions and delay the badly needed project by years.

But the resentment felt by many Hazaras runs deeper than simple questions of energy supply.

In November, thousands of Hazara marched through Kabul to protest at government inaction after seven members of their community were beheaded by Islamist militants and several protesters briefly tried to force their way into the presidential palace.

The protests by a group whose leaders include members of the national unity government have put pressure on President Ashraf Ghani, who has faced growing opposition from both inside and outside the government.

They have also risked exacerbating ethnic tensions with other groups and provinces the government says would have to wait up to three years for power if the route were changed.

Reuters