Gunfire from street battles and loud explosions could be heard across the capital in the worst attack on the city in almost a year.

The Taliban claimed responsibility for the attack, which came as some cabinet members of President Hamid Karzai were being sworn in.

"At least ten people who are suicide bombers are in several buildings, including in banks and shopping centres," security officer Amir Mohammad said at the scene where Afghan forces had cordoned off parts of central Kabul.

He had no information about casualties.

Another security source said as many as 30 attackers could be involved in clashes and three people had been killed.

"Gunmen are besieged in the store," he said, referring to a large store opposite the justice ministry and close to the presidential palace.

"They are firing on security forces and we believe suicide bombers are among them."

Zabihullah Mujahid, spokesman for the Taliban, said 20 of the insurgent group's fighters, including suicide bombers, had occupied several government buildings and were clashing with Afghan security forces.

Nato forces said they were assisting Afghan security forces in securing an area near the central bank, after reports of an explosion.

A security source said two rockets had also landed inside the capital.

"It is a chaotic scene, we do not know what to do and where to go," an official trapped in a government building near the presidential palace said.

The attack was the biggest in Kabul since gunmen stormed the justice ministry and other government buildings in February last year.