The rush-hour explosion sent a plume of smoke into the air above the Puli Mahmood Khan neighbourhood of the Afghan capital and shook buildings up to two kilometres away.
The area was quickly blocked off by Afghan forces and ambulances, while the nearby "Green Zone" diplomatic area was put on lockdown, with no one allowed in or out.
Dozens of people were wounded with fatalities feared as a powerful car bomb rocked Kabul early Monday and gunmen battled special forces in an area housing military and government buildings, officials said.
The rush-hour explosion sent a plume of smoke into the air above the Puli Mahmood Khan neighbourhood of the Afghan capital and shook buildings up to two kilometres away, with an AFP reporter saying he could hear gunshots after the blast.
"At first, a car bomb took place and then several attackers took over a building. The area is cordoned off by the police special forces and (they) are bringing down the attackers," interior ministry spokesman Nasrat Rahimi said.
INJURED AND TRAPPED
Health ministry spokesman Wahidullah Mayar tweeted that 65 wounded people, including nine children, had been taken to hospital. He warned that casualties could rise.
The area was quickly blocked off by Afghan forces and ambulances, while the nearby "Green Zone" diplomatic area was put on lockdown, with no one allowed in or out.
The heavily-secured neighbourhood is home to some military and government buildings, including one shared by Afghanistan's intelligence agency and defence ministry, as well as the Afghan Football Federation and the Afghan Cricket Board.
Shams Amini, a football federation spokesman, told AFP that the blast occurred near the federation's gates.
"Some of our colleagues are trapped inside, we have reports of some injuries. We don't know if the attackers have entered the building," he said.
Nearby Shamshad TV station, which was attacked in 2017, aired images of broken glass and damage to its offices but said it was not the target.
No group immediately claimed responsibility, and police said they did not yet know the target or nature of the blast.
Both the Taliban and the so-called Islamic State group are active in Kabul.
TALKS
The explosion came two days after the Taliban and the US began their seventh round of talks in the Qatari capital of Doha as Washington eyes a breakthrough before Afghanistan's September presidential election.
The negotiations have so far centred on four issues -- counter-terrorism, the foreign troop presence, an intra-Afghan dialogue and a permanent ceasefire.
A potential deal would see the US agree to withdraw its troops after more than 17 years in Afghanistan, igniting deep concerns among huge swathes of Afghans who fear the militants will return to some semblance of power.
In return the Taliban would guarantee the country would never again become a safe haven for violent extremist groups, as happened with Al-Qaeda before the September 11, 2001 attacks.
US officials have previously said they are hoping for a deal before the upcoming Afghan presidential elections, which have already been delayed twice and are now slated for September 28.
