It was the second brazen raid inside the Afghan capital in less than a week, a sign that the insurgency is determined to keep carrying out such spectacular attacks even as the US and Afghan governments try to entice the Taliban into holding peace talks.
The raid started just before dawn when a suicide car bomber blew up his vehicle at the gate of the traffic police department building, close to the Afghan parliament and the Kabul zoo, said the city's police chief, Mohammad Ayub Salangi.
Then, two or three attackers "armed with suicide vests and heavy and light weapons entered the compound," said a statement from Salangi's office.
The fighting left at least 10 wounded, six of them civilians and four members of the security services, the statement said. At least two of the attackers were killed by police.
At least one police officer died in the fighting, said Mohammad Rafi, an officer responsible for the area where the traffic police headquarters is located. He said he saw five attackers enter the building and at least one of them shot down.
Shooting and explosions could still be heard outside the compound shortly after noon, but police insisted the situation was under control and that the insurgents were surrounded.
Taliban spokesman Zabiullah Mujahid claimed responsibility for the attack and said the target of the insurgents was a police training facility "run by foreign military forces."
The traffic police headquarters is not heavily guarded, though it is located on a square leading to the parliament and is also next to the zoo. It is also adjacent to the Afghan border police headquarters and a police training facility - which may have been the more likely target. The traffic police facility, usually teeming with civilians seeking to get drivers licenses and registrations for vehicles, was nearly empty at the time of the attack.
Interior Ministry spokesman Sediq Sediqi said the assault began with a suicide car bombing. Two insurgents, he said, were then shot and killed by Afghan forces while four police commandos were wounded.
Sediqi said Afghan forces were carrying out the operation without any assistance from NATO.
"This shows the ability of the Afghan forces, that they are leading the operation, "he said.
A unit of NATO special forces that trains and mentors Afghan police was at the scene but not taking part in the operation.
Merchant Gul Rahman, who owns a nearby shop, said he heard at least two explosions when the attack began, just before dawn. An Associated Press reporter at the scene said a number of big explosions were heard from inside and around the building, along with heavy gunfire.
Police officer Abdullah Hamidi said two of the explosions were caused by a man in a suicide vest and another by a car bomb.
It was the second insurgent attack inside Kabul in five days.
Last Wednesday, six Taliban suicide bombers attacked the gates of the Afghan intelligence agency in downtown Kabul, killing one guard and wounding dozens. Security forces killed all the attackers. The insurgents carried out the attack by driving a minivan loaded with explosives into a gate of the intelligence agency compound in the capital at noon. The other five attackers wearing suicide vests were in a second minivan that was also loaded with explosives. They were shot and killed and security forces later defused the bomb in their minivan.
The attacks came as the Afghan government has been pushing to get the Taliban to the negotiating table and as President Hamid Karzai and the US negotiate for a quicker pullout of American forces. President Barack Obama said after meeting Karzai in Washington earlier this month that the US-led military coalition would hand over the lead for security around the country to Afghan forces this spring - months ahead of schedule.
Mr Obama also said he agreed with Karzai that the Taliban should open a political office in the Gulf state of Qatar to facilitate peace talks.
Pakistan, the other regional powerbroker, also said last week that it plans to release more Afghan militant detainees in an attempt to boost the peace process ahead of the departure of international troops at the end of 2014. They made the announcement after meeting with Afghan and American officials in Abu Dhabi. Pakistan is thought to hold more than 100 Taliban prisoners and has so far released 26.
In general, Kabul has pressed hard for Pakistan to release its detainees, with some officials saying that they hope the released Taliban can serve as intermediaries. But Washington is concerned about specific prisoners it considers dangerous, saying they could return to the insurgency.
Monday's attack also came as the UN said Afghan authorities have done little to stop abuse in their prisons, despite efforts by the international organization and NATO forces in Afghanistan. In a report issued Sunday, the UN said Afghan authorities are still torturing prisoners - one year after it first documented the abuse and won government promises of detention reform.