The insurgent group said the ongoing assault began with a suicide attack targeting local and foreign intelligence in the capital.

AFP reporters heard a string of loud blasts while police confirmed one explosion and a gunfight close to the heavily-guarded embassy compound.

"Today at one o'clock at Kabul's Abdul Haq roundabout a massive suicide attack on local and foreign intelligence facilities is ongoing," said a spokesman for the insurgent group, Zabiullah Mujahid, in a text message to AFP.

A Western military source said NATO's International Security Assistance force headquarters was one of the targets.

"ISAF HQ is under attack at the moment," the source said.

An ISAF spokesman would not confirm the headquarters was a target but said:

"There is an ongoing attack in the centre of Kabul."

One eyewitness reported that attackers had taken up position in a tall building under construction and were exchanging fire with security forces. An Afghan National Army installation is nearby, as is a Marriott hotel building site, the witness said.

The US Embassy did not immediately have further information.

Copyright AFP (Agence France-Presse), 2011