It was the largest and most brazen attack on the city in nearly a year. Gunfire and loud explosions could be heard across the capital and a huge column of smoke was pouring out of a shopping centre that was at the heart of the attacks.
The Taliban claimed responsibility, saying 20 of their fighters were involved. It came as some members of President Hamid Karzai's new cabinet were being sworn in.
By mid-morning, the main battle was at the Grand Afghan Shopping Centre, a large indoor shopping mall near the justice ministry and presidential palace in the centre of the town that was ablaze, with gunmen holed up inside.
A large explosion could be heard later in another part of the central district of diplomatic and government offices. Private Tolo television said it was a suicide car-bomb outside another shopping mall.
Defence Ministry spokesman Zaher Azimy said of the scene at the Grand Afghan Shopping Centre: "The store is under siege and we are involved in clash with those inside. Some security forces have managed to get inside the store."
NATO forces said at least two armed insurgents were killed.
Mohammad Shah, a shopkeeper in the centre, said: "There was an explosion at the presidential palace gate and then three people who looked like suicide bombers entered the shopping centre and went to the second and third floor.
"There were gunshots from security people, there was black smoke inside the building and the security guys escorted us out," he said. "People carrying RPGs (rocket-propelled grenades) went inside the basement ... the second and third floor are partly burnt down."
ATTACKERS HOLED UP, SOME WITH SUICIDE VESTS
Afghan forces cordoned off parts of central Kabul as the fighting erupted.
"At least ten people who are suicide bombers are in several buildings, including in banks and shopping centres," said Amir Mohammad, a security officer said at the scene.
Another security source said as many as 30 attackers could be involved in clashes and at least three people had been killed.
"Gunmen are besieged in the store," he told Reuters. "We believe suicide bombers are among them."
Zabihullah Mujahid, spokesman for the Taliban, said 20 of the insurgent group's fighters, including suicide bombers, had occupied several government buildings and were fighting Afghan security forces.
A Reuters correspondent inside the vice president's office which is close to government buildings and ministries targeted by attackers, was rushed into a safe room with other officials as the sound of gunfire was in the streets outside.
The NATO-led International Security Assistance Force said it was "working closely with our Afghan partners to aggressively contain the situation."
Several small explosions were reported near the Grand Afghan Centre and nearby Serena Hotel.
The hotel, where many foreigners stay, was near the scene but did not appear to have come under direct attack.
"It is a chaotic scene, we do not know what to do and where to go," an official in a building belonging to the ministry of telecommunications near the presidential palace told Reuters.
The attack was the biggest in Kabul since gunmen stormed the justice ministry and other government buildings in February.
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