A car filled with explosives pulled alongside a bus carrying 33 German peacekeepers and detonated in Kabul (search) Saturday, leaving four soldiers dead and more than two dozen wounded.

The assault was the result of terrorism, said German Chancellor Gerhard Schroeder (search), who called the acts "cowardly and underhanded."

German Defense Minister Peter Struck said his Afghan colleague, Mohammed Fahim, told him there were indications Al Qaeda may have been behind the attack.

"I think that not only Al Qaeda but former members of the Taliban and other followers of the former Afghan leader would try to chase the international security forces, including the Germans, out of Afghanistan," Struck said Saturday.

Though Germany and America haven't seen eye to eye in regards to the war in Iraq, President Bush phoned Schroeder offering his condolences. According to German officials, Bush also vowed to help Germany fight terrorism.

The bus was taking German peacekeepers to Kabul's international airport to return home — some on leave, some after completing their mission in Afghanistan — when the attack took place, said a spokeswoman for International Security Assistance Force (search), or ISAF.

A taxi approached the convoy the bus was in and tried to slide in between several of the vehicles, German Chief of Staff Wolfgang Schneiderhan said.  When this did not work, the driver pulled up alongside the bus and triggered the explosion.

A district police commander in the city, Gen. Abdul Raouf Taj, quoted witnesses as saying a yellow taxi sped toward the bus, rammed into the side of it and exploded.

Little was left of the charred taxi, and Taj said it was unclear how many people had been inside. State television reported there were two occupants.

"We found several pieces of a body and one hand still attached to the steering wheel," Taj said of the taxi, adding the driver had been wearing traditional Afghan clothes.

Taj said the taxi's license plate was found near the scene and police were trying to trace its owner.

Twenty-nine soldiers were wounded, seven of them seriously, German Defense Minister Peter Struck said in Berlin.

Officials did not say how many homicide attackers may have been in the car. State television reported there were two occupants.

Suspicion immediately fell on remnants of Al Qaeda and the defeated Taliban (search) regime, as well as fighters loyal to renegade warlord Gulbuddin Hekmatyar (search). The three groups have allegedly joined forces in a bid to destabilize the government of President Hamid Karzai (search), which is largely dependent on foreign troops for its survival. There was no claim of responsibility.

Afghanistan has seen an upswing in attacks — thought to be by Taliban fighters — against American troops, particularly in the south and east.  But Saturday's blast was the first deadly assault on peacekeepers since they arrived in Afghanistan to bring security to the capital after the fall of the hardline Taliban regime in late 2001.

"This cowardly and underhanded attack was carried out by terrorists who are against the efforts to bring peace and stability to Afghanistan," Schroeder said in Berlin.

It was not immediately clear if the attacker was targeting the Germans specifically, or the ISAF in general, said Schneiderhan, the chief of staff.

Karzai, who returned Saturday from a trip to Britain, said he "strongly condemned the terrorist attack."

Bush, in his call with Schroeder, said "the war against terror is not over and that Germany and America both have a special role to play in Afghanistan to return democracy and stability to this country," said Struck, the defense minister.

The two leaders have been at odds since last year when Schroeder ran a re-election campaign that emphasized his opposition to U.S. policy on Iraq and the eventual war. Bush nevertheless had a friendly chat with Schroeder last Sunday, their first talk in six months, before sessions began at a summit of top economic powers in Evian, France.

After the blast, witnesses described a chaotic scene, with bits of metal strewn around.

"The explosion made a very loud noise. It shook all of our shops," said Fawad Ahmad, who works at a tire repair store in the neighborhood were the attack happened, not far from the base housing German and Dutch troops.

Dozens of German peacekeepers formed a cordon in the streets around the blast site, barring vehicles, as a large German military helicopter landed in the road nearby.

Germany and the Netherlands, currently in joint command of the force, are due to hand over control to NATO on August 11. Some 1,800 Canadian troops will replace the German and Dutch troops who now provide the backbone of ISAF.

The Associated Press contributed to this report.