An official with Hart Security in London told Al Jazeera that “there was an incident in the vicinity of our villa in Kabul. Some locals have been injured. And the police have cordoned off the area."
Zabihullah Mujahid, a Taliban spokesman, said four suicide bombers equipped with hand grenades, rockets and assault rifles launched the attack against Hart security, which killed "many foreigners".
Police and government officials said there were not more than two attackers and no foreigners had been hurt.
"It was a suicide attack. The situation is under control," Zemarai Bashary, the interior ministry spokesman, said.
The attack came only hours after the United Nations mission in Afghanistan released a report that said civilian casualties had risen 31 percent in the first six months of the year, compared with the same period in 2009.
More than three-quarters of those casualties were blamed on the Taliban and other armed groups battling foreign forces and the Afghan government.
The Taliban condemned the report, accusing the UN of "taking sides with the invader forces".
"It's all one sided information. Their information based on what invaders tell them or the puppet government of Kabul," a Taliban spokesman told Al Jazeera.
Violence across Afghanistan has reached its highest levels since the Taliban were ousted by US-backed Afghan forces in late 2001, with the death toll for foreign troops also hitting record levels.
Some 150,000 foreign troops are squared off against the Taliban.
A suicide bomber killed four Afghans in an attack apparently aimed at a convoy of foreign forces in Kabul on July 18, and Taliban fighters embarrassed Afghan officials by firing rockets at a major peace conference in the capital in June.
In February, two suicide bombers killed 14 people and wounded 32 when they blew themselves up near Kabul's biggest shopping centre and a hotel.