Taliban militants armed with rockets and automatic weapons mounted a suicide attack on a hotel at a popular Kabul beauty spot Friday, taking hostages and killing at least four people.
Afghan security forces and coalition troops were responding to the assault at Qargha Lake on the outskirts of the Afghan capital, a spokesman for NATO's International Security Assistance Force (ISAF) told AFP.
Security forces launched an operation to end the militant strike around 5:30 am (0100 GMT), police said, though fighting was still going on several hours later.
An AFP photographer at the scene heard large explosions and automatic gunfire and saw two NATO helicopters overhead.
Just hours before the assault, President Hamid Karzai warned that attacks against local police and soldiers were increasing as they prepare to take over security when NATO combat troops leave in 2014.
Interior Ministry spokesman Sediq Sediqqi said that three hotel guards and at least one police officer were killed, while a number of civilian hostages taken by the militants were freed, though he did not specify how many.
"We don't have any precise figure about civilian casualties. Four or five suicide attackers were involved in the attack. Two of them have been killed and three others are resisting," he told AFP.
The Taliban, who are waging a bloody 10-year insurgency against Karzai's Western-backed government, claimed responsibility for the hotel raid.
"Our mujahideen (holy warriors) last night attacked this hotel because high-profile people from embassies, ISAF and the Kabul administration gather here every Thursday for wild parties, drinking and prostitution," Zabihullah Mujahid, a spokesman for the militants, told AFP.
The assault began around 11:30 pm (1900 GMT) Thursday, Mohammad Zahir, the head of Kabul police criminal investigation department said, when suicide attackers armed with rockets and Kalashnikov rifles stormed a gathering at the Spozhmai Hotel.
At least one of the attackers detonated an explosive suicide vest, Zahir said.
Qargha lies around 10 kilometres (six miles) from central Kabul and its pleasant weather and greenery make it a popular picnic spot for daytrippers from the capital.
The lake is surrounded by hotels, restaurants and wedding halls.
Taliban violence has surged in recent days with a series of strikes on Afghan-NATO military posts.
This week's biggest attack came on Wednesday when a suicide bomber on a motorbike rammed a joint Afghan-NATO patrol in the eastern city of Khost, close to the Pakistan border, killing 21 people including three US soldiers.
The hotel assault will heighten fears about security as NATO prepares to hand responsibility to Afghan forces and recall the vast majority of its 130,000 combat troops.
Karzai admitted Thursday his government and its Western allies had failed to bring peace to Afghanistan, which has suffered almost continuous conflict for the past three decades, saying "our land has not been secured, our homes, our people are not safe".
In April militants launched coordinated attacks on government offices, embassies and foreign bases in Kabul in the biggest assault on the Afghan capital in 10 years of war.