Afghan officials said on Monday that a car bombing has targeted a police compound and the nearby Iraqi embassy in Kabul.

Sources said that fighters are holed up in a building close to the Iraqi embassy in Shar-e-Naw and a gun battle is under way.

According to witnesses, a loud explosion was heard followed by gunfire. They also reported seeing smoke billowing from the neighborhood.

“We heard two explosions near the Iraqi embassy and part of the building has been damaged,” Al Jazeera quoted Mohsen Negaresh, a witness, as saying.

Two police officials said the car bomb exploded outside the Iraqi embassy, and gunmen attempted to enter the building.

The number of casualties is not known yet. No group has so far taken responsibility for the attack, though both the Taliban and ISIS militant groups have recently carried out similar attacks in Kabul.

Weeks ago, the Pentagon announced that the leader of ISIS group’s branch in Afghanistan has been killed in a U.S. raid in the northeastern province of Kunar.

“US forces killed Abu Sayed, the emir of Islamic State of Iraq and Syria -- Khorasan Province (ISIS-K) -- in a strike on the group's headquarters in Kunar Province, Afghanistan, July 11,” Pentagon spokeswoman Dana White said in a statement