“Fight still on as at the time of posting this piece,Info from a Journo on ground in Kabul”
At least two people were killed. Hostages were seized, including women and children, but 18 were later freed.
The Taliban claimed the attack in the area favoured by Kabul residents.
The gunmen launched the attack on the hotel late on Thursday, the officials say.
“Police forces have besieged the hotel where people gathered for a picnic or wedding party,” Kabul deputy police chief Daoud Amin told the AFP news agency. “We will be very careful so that not to harm to civilians,” he added.
Some guests reportedly jumped out of hotel windows to flee from the attackers.
The US-led coalition is providing support to the Afghan security forces, who are trying to flush out the insurgents from the hotel.
Reuters news agency quotes the Taliban as saying they attacked the hotel because wealthy Afghans and foreigners used it for “wild parties”.
Violence has recently increased across the country, with at least three US soldiers and about 20 Afghans killed in a series of attacks over the past seven days.
The attacks come as Nato prepares to hand responsibility to Afghan forces when the alliance’s combat troops leave in 2014.
Source: BBC News