In what appeared to be a well planned and co-ordinated attack Taliban militants set off explosions in the heart of Kabul.
A gun battle on the streets followed the attack the initial bombing.
Fighting erupted near the Serena Hotel and presidential palace. A statement on a Taliban website said the raid had specifically targeted the hotel and government buildings.
President Karzai was inside his sprawling palace swearing in new members of his cabinet. He has since issued a statment saying security has now been restored, while telling his new ministers that his country faces many other threats.
“This is just one of the dangers. Other dangers threatening Afghanistan are more dangerous and could inflict more harm to Afghanistan both from within the country and outside,” he said.
One Government source claimed seven suicide attackers – all dead – were involved while a civilian and four security forces were killed.
The insurgents action is seen as a clear sign they intend to escalate their fight in what was the biggest attack in the capital since October last year.
It comes just weeks before a conference in London intended to demonstrate the Afghan government’s ability and willingness to take charge.