"I can confirm that a rocket landed in the garden in the Intercontinental Hotel," ISAF spokesman US Major Kevin Arata told AFP.
The explosion had caused some structural damage but there were no reports of any casualties, he said.
"A quick reaction force from ISAF is on the scene right now," he said.
Police had cordoned off the area around the hotel, an AFP correspondent at the scene said.
The hotel manager said a single rocket had hit a wall 20 metres behind the hotel marking the edge of the hotel property.
All the windows in the back of the hotel were smashed and a wall about 20 metres behind the hotel on the east side was partially destroyed.
Police and ISAF peacekeeping troops were investigating the suspected blast site behind the hotel. Kabul police also said there were no casualties.
The hotel in western Kabul is about 1.5 kilometres from the British embassy.