A suicide squad attack in the heart of Kabul's fortified diplomatic quarter has killed 21 people, among them an aspiring Labour politician, the mission head of the International Monetary Fund and a top UN official with years of experience in Afghanistan.

The carnage began on Friday night when a suicide bomber blew himself up at the door of Taverna du Liban and ended a couple of hours later with almost everyone who had been inside the popular restaurant dead: 13 of them were foreigners and eight were Afghans.

The roll call of the international victims, from the US, UK, Denmark, Lebanon, Malaysia, Canada and Russia, was testimony to the diversity of the foreign civilians working in Afghanistan. There were no soldiers in the restaurant.

The brutality of the attack and the choice of a soft civilian target are likely to alter the way expats, from aid workers to finance specialists, operate in Kabul. They have been relatively insulated from the insurgency, which has focused mostly on diplomatic or military installations in the past.

British prospective MEP Dharmender Singh, known as Del, was one of those killed in the attack. Born and raised in Southampton, he was a development consultant with years of experience working in countries including Sudan, Kosovo, Libya and Afghanistan.

Labour leader Ed Miliband said he was "appalled and shocked by this barbarous act of terror" and paid tribute to Singh. He said: "My thoughts – and the thoughts of the whole Labour party – are with the family and friends of Del Singh who was killed in yesterday's tragic suicide bomb in Kabul. He dedicated his life to working with people across the world who needed his support."

The other Briton was named as Simon Chase, originally from Chester, but who had been living in Northern Ireland with a partner and child. He is thought to have been working in Kabul as a bodyguard, according to his home town newspaper.

The gunmen reportedly went around the restaurant shooting patrons as they cowered under tables. The two Lebanese dead were the country director for the International Monetary Fund, Wabel Abdallah, and his friend, the restaurant's owner Kamal Hamade.

Both men had been in Afghanistan for many years; Abdallah had helped the government and donors untangle the $900m Kabul Bank scandal that embroiled much of the political elite.

Hamade was loved by foreigners and Afghans for his quiet generosity; meals always ended with free chocolate cakes ,and orders were usually expanded with several free dishes.

Also among the dead was Russian Vadim Nazarov, one of three UN staff killed. He first went to Afghanistan in the 1980s during its war with the Soviet Union and had an encyclopedic knowledge of the country and its rival factions. In his UN role he had reportedly been trying to broker peace talks with the insurgent groups that killed him.

The American University of Afghanistan, an elite English-language organisation with many foreign employees, said two of its staff had been killed, but did not release names. It promised to review security but said academic activities would continue.

Michael Smith, the university's president, said: "Such senseless violence flies in the face of the sentiments of our students and the Afghan people who share our grief."

A spokesperson for the US State Department said: "Among those murdered in this shameful act were Wabel Abdallah, the IMF's Resident Representative, personnel from the United Nations, and civilians from around the world, including US citizens, who had come to help build a peaceful, prosperous future for Afghanistan and its people. Several Afghan citizens were also tragically killed.

"With this despicable, targeted attack on innocent civilians, terrorists continue to demonstrate blatant disregard for life and for the peaceful, prosperous future Afghans want and are working so hard to achieve."

The Taliban claimed responsibility for the attack while the gunmen were still battling government forces, and on Saturday said that the killings were revenge for the deaths of Afghan civilians in a Nato airstrike in a province near Kabul several days ago.

But the attack devastated foreign as well as Afghan families, who on Saturday buried their dead in accordance with Islamic tradition. They included a young couple who had been married less than a year and Mohammad Ali, an employee of a telecoms firm.

His family spent the previous evening waiting in horror at the edge of the police cordon, hoping for a miraculous escape. "My son, my son, they killed my son," his mother wailed at home on Saturday, almost senseless with grief. "He had just bought a house for himself."

There appeared to have been just one survivor, a cook who had fled to the roof after the initial suicide blast, which damaged cars and shattered windows along the street. He had hid behind a chimney for several hours until rescued by police.

The bomber bypassed the light security of a steel front door to blow away a side wall, allowing gunmen to rush into the restaurant kitchen, suggesting the attackers were familiar with the restaurant's layout. Afghan media reported that the district police chief had been removed from his job and was under investigation.