The assault began around midday 0730 GMT with a large explosion at Counterpart International, a non-profit group funded primarily by the US Agency for International Development
Taliban militants stormed a US-funded aid group's central Kabul compound Tuesday, having targeted the organization for promoting Western culture and the "inter-mixing" of men and women.
At least five people were killed and dozens more wounded in the latest attack in the Afghan capital, which came even as US and Taliban officials were meeting in Qatar for peace talks.
The assault began around midday 0730 GMT with a large explosion at Counterpart International, a non-profit group funded primarily by the US Agency for International Development (USAID) and the US State Department.
Interior ministry spokesman Nasrat Rahimi said four attackers then entered the compound before Afghan security forces launched an hours-long clearance operation. At about 6:00 pm, Rahimi said "all the attackers have been killed."
He said four civilians and one police officer were also killed, while about 200 people had been rescued from the area throughout the day.
In a statement, Counterpart said it was working to confirm the well-being of its staff.
Taliban spokesman Zabihullah Mujahid quickly claimed responsibility for the attack, saying Counterpart International was targeted because it promoted the "inter-mixing" of men and women.
The aid group mentored "Kabul admin workers in various aspects of brutality, oppression, terror, anti-Islamic ideology & promotion of western culture," Mujahid said on Twitter.
Counterpart's website says it runs an Afghan civic engagement program supporting women and other marginalised groups across Afghanistan.
Among its stated goals is providing access to election information for Afghan voters, many of whom live in rural areas.
The Taliban's hardline statement against Western values comes as the group meets with US peace envoy Zalmay Khalilzad in Doha in the latest round of talks aimed at finding a way out of Afghanistan's nearly 18-year old war.
The Taliban are notorious for their treatment of women during their reign from 1996-2001, when the Islamist extremists kept women locked up in houses, barred them from getting an education and sometimes stoned them to death on flimsy allegations of adultery.
The huge explosion shook nearby buildings and shattered windows, and Rahimi said at least 24 people were wounded – including one foreign national.
"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.
John Bass, the US ambassador to Afghanistan, strongly condemned the attack against a US non-governmental organization.
"The targeted organization helps local communities, trains journalists and supports the Afghan people," Bass said on Twitter.
"For this, it is the target of senseless violence," he added, thanking local security forces for their rapid response.
The UN Assistance Mission in Afghanistan said the attack was "particularly deplorable, hitting civilians helping Afghans & taking place during Ramadan."
Difficult peace talks
Suhail Shaheen, the Taliban's political spokesman, told AFP earlier this week that the latest round of peace talks, currently taking place in Doha, had become 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.
Thomas Joscelyn, a senior fellow at the Foundation for Defense of Democracies and editor of its Long War Journal, said Khalilzad is only "pretending" the Taliban can credibly renounce international terrorism.
"This is an obvious terrorist attack by the Taliban right inside Kabul – they deliberately targeted a civilian facility," Joscelyn said on Twitter.
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.
Last year however 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, in the first formal nationwide ceasefire since the US-led invasion of 2001.
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.
According to Counterpart International's website, the organization was founded in 1965 by Australian actress Betty Bryant Silverstein and a priest called Stan Hosie.