Press reporters at the scene heard bursts of gunfire and saw shooting from the roof of the five-story Inter-Continental hotel, which is frequented by Afghan political leaders and foreign visitors.
Police ordered bystanders to lay on the ground for safety.
There was no immediate word on casualties in the rare, nighttime attack in the Afghan capital.
A guest who was inside also said he heard gunfire echoing throughout the building. The hotel sits on a hill overlooking the city and streets leading up to it were blocked. The scene was dark as electricity at the hotel was out.
Taleban spokesman Zabiullah Mujahid claimed responsibility for the attack in a telephone call to the AP.
Azizullah, an Afghan police officer who uses only one name, told an Associated Press reporter at the scene that at least one bomber entered the hotel and detonated a vest of explosives. Another police officer, who would not disclose his name, said there were at least two suicide bombers.
Jawid, a guest at the hotel, said he jumped out a one-story window to flee the shooting.
“I was running with my family,” he said. “There was shooting. The restaurant was full with guests.” The Inter-Continental - known widely as the “Inter-Con” — was once part of an international chain. But when the Soviets invaded Afghanistan in 1979, the hotel, was left to fend for itself.
The Inter-Continental, which opened in the late 1960s, was the nation's first international luxury hotel. It has at least 200 rooms.
It was used by Western journalists during the US-led invasion of Afghanistan in 2001, has been targeted before.
On Nov. 23, 2003, a rocket exploded nearby, shattering windows but causing no casualties.
Twenty-two rockets hit the Inter-Con between 1992 and 1996, when factional fighting convulsed Kabul under the government of Burhanuddin Rabbani. All the windows were broken, water mains were damaged and the outside structure pockmarked. Some, but not all, of the damage was repaired during Taleban rule.
Attacks in the Afghan capital have been relatively rare, although violence has increased since the May 2 killing of Osama Bin Laden in a US raid in Pakistan and the start of the Taleban's annual spring offensive.
On June 18, insurgents wearing Afghan army uniforms stormed a police station near the presidential palace and opened fire on officers, killing nine.
Late last month, a suicide bomber wearing an Afghan police uniform infiltrated the main Afghan military hospital, killing six medical students. A month before that, a suicide attacker in an army uniform sneaked past security at the Afghan Defense Ministry, killing three people.
Other hotels in the capital have also been targeted.
In January 2008, militants stormed the capital's most popular luxury hotel, the Serena, hunting down Westerners who cowered in a gym during a coordinated assault that killed eight people. An American, a Norwegian journalist and a Philippine woman were among the dead.
On Feb. 26, 2010, insurgents struck two residential hotels in the heart of Kabul, killing 20 people including seven Indians, a French filmmaker and an Italian diplomat.
On Dec. 15, 2009, a suicide car bomber struck near the home of a former Afghan vice president and a hotel frequented by Westerners, killing eight people and wounding nearly 40 in a neighborhood considered one of Kabul's safest.
On Jan. 15, 2008, militants stormed Kabul's Serena Hotel in a coordinated assault that killed seven people including a Norwegian journalist.
