At least three police were killed in the early stages of the attack, said Mohammad Yaqub, the deputy police chief for eastern Khost province, near the border with Pakistan.

He said at least two explosions had been heard soon after the bold attack was launched.

Violence has spiked across Afghanistan in recent weeks, since the Taliban announced the start of their long-awaited "spring offensive," with attacks against supposedly secure targets across the country.

In Kabul, a suicide bomber killed six medical students in an attack inside the cafeteria of the main military hospital in a heavily guarded area of the capital on Saturday. More than 20 were wounded.

U.S. commanders had also warned of a spike in violence this month as the Taliban try to push back against military gains against insurgents in the south over the past 18 months.

Gunfire was heard soon after the attack was launched in the traffic control center in a police compound in the center of Khost city, although fighting tailed off several hours later as security forces surrounded the building.

Khost police chief Abdul Hakim Esaaqzai said the attackers were wearing border police uniforms. He said Afghan troops had entered the building to try to bring the siege to an end.

Television pictures showed at least one building on fire as Afghan soldiers skirted beneath a high wall on the outside of the compound.

Several members of the NATO-led International Security Assistance Force (ISAF) were also seen further back from the building, although they did not appear to be engaged in the fighting.

Interior Ministry spokesman Zemari Bashary said at least three attackers wearing suicide vests were still inside the building. He said the dead included two police and a gardener and that four police had also been wounded.

"The assailants are resisting from the compound, they are holed up. One suicide bomber blew himself up inside the building and three others are still resisting," Bashary said.

A car packed with explosives was found near the building and was being taken away to be defused, he said.

The surge in violence comes as U.S. and NATO forces prepare to begin a gradual troop drawdown and handover of security responsibility to Afghans from July.

The process is set to end with the withdrawal of the last foreign combat troops by the end of 2014.

Despite the presence of 150,000 foreign troops, violence across Afghanistan in 2010 hit its worst levels since the Taliban were ousted by U.S.-backed Afghan forces in late 2001.