Gunmen stormed a guest house popular with foreigners ahead of a music concert in the Afghan capital Kabul on Wednesday evening and shooting continued as authorities tried to clear them out, an army commander said.
There was no immediate word of any casualties, nor any claim of responsibility.
Police cordoned off the area around the Park Palace guest house in Kabul's Kolola Pushta area immediately after the attack began around 8:30pm local time (1600 GMT).
Police, army and special forces were at the scene and had rescued at least 16 people, said Qadam Shah Shaheem, commander of the Afghan National Army's 111th Corps.
Three police in the area said several attackers had entered the Park Palace and were believed to be still inside. All three spoke on condition of anonymity.
About two hours into the standoff, authorities had entered the building and evacuated at least 16 people, including two Pakistanis, army commander Shaheem said.
"Today, there was going to be a music concert there. Fortunately, most guests had not arrived yet," he said.
He added that around a dozen people were still believed to be inside.
"The rescue operation is still on ... It is a big, two-storey building with several rooms so it will take some time to clear it," he said.
Kolola Pushta is home to several international guest houses and hotels and is near both the Ministry of Interior and the Indian embassy.
India's ambassador to Afghanistan tweeted that all Indian nationals were reported safe.
The coordinated assault on the guest house was the second on Wednesday in Afghanistan.
Earlier, gunmen opened fire at a meeting of prominent Muslim clerics in the southern province of Helmand, killing at least seven people, police official Jan Aqa said.
The Ulemma Council, the highest religious authority in a deeply conservative country, came under attack after it had repeatedly announced its support for security forces fighting the hard-line Islamist Taliban insurgents.
Taliban insurgents claimed responsibility for the Helmand attack.
The Taliban have stepped up attacks since they announced their "spring offensive" last month, after most foreign forces pulled out at the end of last year.
Earlier this month, insurgent suicide bombers twice hit buses carrying staff of the attorney general's office in Kabul, killing at least four people.
Ousted from power in 2001, the Taliban have been fighting to bring down the US-backed government in Kabul.