A suicide attack targeted the Afghan intelligence agency headquarters on Wednesday, followed by sounds of gunfire in a tightly-secured area of Kabul housing key government buildings, officials said.
"It was a suicide explosion at the gate," an official from Afghanistan's National Directorate of Security (NDS) told AFP. "There are also some gunshots also heard from the inside.
"We don't know how many people are involved," he said, speaking on condition of anonymity.
"It's a big facility and very, very sensitive, with a very high security installation and system," he said, expressing concern at the ability of the attackers to breach security.
A witness told AFP that it was a huge explosion.
"It was at the gate of the National Directorate of Security," the witness said. "I saw some people falling down near the explosion."
An AFP team at the scene saw at least two people being loaded into ambulances, but there was no immediate word on casualties.
The area also houses the police headquarters and interior ministry, and the blast was heard throughout the nearby diplomatic district of Wazir Akbar Khan.
The NDS plays a crucial role in the fight against the Taliban, who have been waging an insurgency since being ousted from power by the 2001 US-led invasion for harbouring Al-Qaeda leader Osama bin Laden after the 9/11 attacks.
Its chief was wounded in an assassination attempt by a suicide bomber posing as a fake Taliban peace envoy at a spy agency guest house in Kabul on December 6, just months after he took office.
"There was a big boom around noon and then we heard an exchange of fire close to the Green Zone," a diplomatic source told AFP.
"For us, it's a complex attack. There was first a suicide attack, followed by gun shots."
A spokesman for NATO's International Security Assistance Force said ISAF was not involved in the incident and he was unaware at this stage of the cause of the blast or casualties.
Afghan police and other security forces are increasingly targets of Taliban attacks as they take a bigger role in the fight ahead of the NATO withdrawal scheduled for 2014.
The NDS influence on the conduct of the war is likely to grow as the US and NATO withdraw the bulk of their combat troops from the country by end 2014 and hand responsibility for the war to Afghan forces.
The NDS chief, Asadullah Khalid, is still receiving medical treatment in the United States.
Kabul is regularly targeted by Taliban insurgents waging war against the government of President Hamid Karzai and his NATO backers.
In the most recent attack, a Taliban car bomb targeted a US company in Kabul on December 17, killing one person and wounding at least 15.
A suicide car bomber killed 12 people, including eight South Africans, on September 18.