Everything within a 2 tile range of the blast will feel the full force of the effect (only difference being that any unit targeted will die instantly, as opposed to being severely wounded). The city and improvement damage is the same I think. I guess that part of the challenge is that you have to figure out where the blast is going, and try to pick a spot that won't touch any other Civ, CS, or your own units. It doesn't show you beforehand, and doesn't give you a warning.