Updated 10.30:
Many people have been killed and wounded in a suicide blast in Kabul, the Afghan president has said.
The death toll has risen to 28 after an explosion in the centre of the Afghan capital, Kabul.
More than 320 people have been injured in att he blast which was followed by prolonged gunfire.
Security officials believe a Taliban suicide bomber targeted the offices of the main security agency.
Heavy gunfire followed the explosion, during rush hour in a residential neighbourhood close to the ministry of defence and military compounds.
The Afghan health ministry confirmed several people were dead and said more than 200 were wounded.
A Taliban spokesman said the group carried out the attack, a week after it said it was launching its "spring offensive".
It had warned of "large-scale attacks".
In a statement, President Ashraf Ghani said: "We condemn in the strongest terms the terrorist attack in Puli Mahmood Khan neighbourhood of Kabul, as a result of which many of our countrymen were martyred and wounded."
The blast sent clouds of acrid smoke billowing into the sky and rattled windows several miles away.
"The first blast was carried out by a suicide bomber in a car and possibly one or two bombers are still resisting," interior ministry spokesman Sediq Sediqqi said. "The scene of the attack has been completely cordoned off by Afghan security forces."
Taliban spokesman Zabihullah Mujahid claimed their fighters had managed to enter the office of the National Directorate of Security (NDS), the main Afghan spy agency.
Afghan officials did not confirm that claim but intense gun battles could be heard near the NDS compound.
The Taliban warned it would "employ large-scale attacks on enemy positions across the country" during the offensive dubbed Operation Omari in honour of the movement's late founder Mullah Omar, whose death was announced last year.
The Taliban's resurgence has raised serious questions about whether Afghan forces could hold their own, with an estimated 5,500 troops killed last year, the worst ever toll.
A four-country group comprising Afghanistan, the United States, China and Pakistan has been holding meetings since January aimed at trying to start peace talks, but their efforts have so far been in vain.
On Sunday, the United Nations reported an "appalling" rise in the number of children killed in fighting in Afghanistan.
Between January and March, 161 children were killed and 449 others injured, the UN's mission in Afghanistan said in a new report.
