Taliban militants Wednesday overran a central Kabul compound housing an international aid organisation, Afghan officials said, the latest assault to rock the war-torn city.
The attack comes as the US and Taliban representatives continue negotiations in Qatar aimed at bringing an end to the nearly 18-year-old conflict, while fighting continues to rage across Afghanistan.
Interior ministry spokesman Nasrat Rahimi said the latest attack began with an explosion near the offices of Counterpart International, an NGO with operations in Afghanistan.
Officials earlier wrongly identified the target as the nearby CARE International.
"Some attackers have entered the NGO's compound. The police have surrounded the area and a clearing operation is ongoing," Rahimi said.
In a tweet, Taliban spokesman Zabihullah Mujahid said Counterpart was involved in "harmful" activities in Afghanistan, and was linked to USAID. Wahidullah Mayar, the spokesman for the ministry of public health, said at least nine people had been wounded.
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Witnesses said the explosion shook nearby buildings and shattered windows.
"We started running out of the building and while running outside I heard small gunfire and the sound of grenades going off nearby," said Akbar Khan Sahadat, a prosecutor in the Attorney General's office which was close to the scene of the blast.
Taliban political spokesman Suhail Shaheen told AFP earlier this week that the latest round of peace talks had been bogged down over the issue of when foreign forces might withdraw in return for the Taliban security guarantees.
The two foes are hammering out a deal that could see foreign forces leave Afghanistan in return for a ceasefire, talks between the government and the Taliban, and a guarantee the country will not be used as a safe haven for terror groups.
The talks follow a massive peace summit in Kabul last week where President Ashraf Ghani offered the Taliban a ceasefire to begin on the first day of Ramadan, but the insurgents refused.
The Taliban have rebuffed repeated calls to halt fighting over the last year as they seek to gain leverage at the negotiating table by pressing the fight on the battlefield.
Last year the Taliban announced a three-day ceasefire at the end of Ramadan after Ghani declared a unilateral truce for eight days earlier in the month.
It was first formal nationwide ceasefire since the US-led invasion of 2001 and saw unprecedented scenes of reconciliation and jubilation across the country.
Since then the insurgents have steadfastly refused to talk to Ghani, who they view as a US puppet, and talks thus far have cut out his government.
Meanwhile, Afghanistan's war rages on, with thousands of civilians and fighters being killed each year.
US forces continue to train Afghan partners on the ground and strike the Taliban from the air in a bid to push the war to a political settlement.