The attack unfolded as Cabinet members were being sworn in by President Hamid Karzai despite the rejection by parliament of the majority of his choices.

Taliban militants wearing explosives vests launched a brazen assault on the heart of Kabul on Monday, as suicide bombings and gunbattles near the presidential palace and other government buildings paralysed the capital for hours.

Afghan police and NATO troops managed to restore security after at least three blasts and machine-gunfire that echoed across the mountain-rimmed city. Given what might have been, the casualty toll was relatively low: 12 killed including seven attackers.

Still, the attack was the most ambitious in Kabul in nearly a year and demonstrated the vulnerability of the Afghan capital despite extensive security throughout the city. The assault was also a clear sign the Taliban plan to escalate their fight as the U.S. and its allies ramp up a campaign to end the war.

“We are so concerned, so disappointed about the security in the capital,” said Mohammad Hussain, a 25-year-old shopkeeper, who witnessed the fighting. “Tens of thousands of U.S. and NATO troops are being sent to Afghanistan, yet security in the capital is deteriorating.”

The violence began shortly before 10 a.m. and ended some five hours later after attacks at four locations within an area of less than one square mile. The area, in the center of the capital, is a mix of government buildings surrounded by concrete walls, shops and hotels.

In the first assault, a suicide bomber detonated his explosives at Pashtunistan Square, a major intersection near the gates to the presidential palace, the Central Bank and the luxury Serena Hotel, which is frequented by Westerners.

Clashes broke out as other militants fought with Afghan troops, who converged quickly on the scene in pickup trucks and armored vehicles. Police sealed off the area and helicopters buzzed overhead.

Several attackers then stormed into a nearby shopping mall, prompting a standoff with security forces. Two bombers were killed when their explosives detonated, setting the four-storey building ablaze.

About 11.17 am local time, another suicide attacker drove toward the area in an ambulance but blew himself up after he was stopped at a checkpoint near the Education Ministry.

Three other attackers entered another commercial building housing offices at about 1 p.m., holding off security forces for about two hours before they were killed.

The details were provided by Interior Minister Hanif Atmar at a press conference and contradicted previous accounts given amid the chaos.

It was the biggest assault on the capital since October 28, when gunmen with automatic weapons and suicide vests stormed a guest house used by U.N. staff, killing at least 11 people including five U.N. staff. Taliban suicide bombers and gunmen also struck government buildings in the capital in February 2009, killing more than 20 people.

In Monday’s attack, Taliban spokesman Zabiullah Mujahid told The Associated Press that 20 armed militants, including some with suicide vests, had entered Kabul to target the presidential palace and other government buildings in the center of the capital. The Defence Ministry said seven militants were killed but that it was possible others were burned in the shopping center blaze.

Debris was strewn on the streets, which were quickly abandoned by crowds that normally fill the area.

An intelligence agent was killed, along with two policemen and two civilians, including one child, according to Mr. Atmar. He said 71 other people were wounded, including 35 civilians. Most of the injuries were caused by hand grenade attacks launched by the militants, he said.

The attack unfolded as Cabinet members were being sworn in by President Hamid Karzai despite the rejection by parliament of the majority of his choices. Presidential spokesman Waheed Omar said the ceremony had occurred as scheduled, and everybody in the palace was safe.

“As we were conducting the ceremony to swear in the Cabinet, a terrorist attack was going in an area of Kabul close to the presidential palace,” Mr. Karzai told reporters. “This is just one of the dangers.”

Militants have become increasingly brazen in challenging Afghan and international forces as the U.S. and NATO allies begin sending 37,000 more troops to join the fight.

Richard Holbrooke, the U.S. special envoy to Afghanistan and Pakistan, said the Taliban behind the attack were part of a set of extremist groups operating in the border areas between Afghanistan and Pakistan.

“They are desperate people; they are ruthless,” he said from New Delhi after a trip to Afghanistan. “The people who are doing this certainly will not survive the attack, nor will they succeed. But we can expect these sort of things on a regular basis.”

NATO officials said the attack appeared timed to upstage preparations for a Jan. 28 major international conference in London on ways to shore up the Afghan government to confront the growing Taliban threat.

U.S. Lt. Gen. David Rodriguez, commander of NATO’s International Security Assistance Force, blamed the Haqqani network, an al-Qaeda-linked Afghan Taliban faction based in Pakistan. The group also was believed to be linked to the Dec. 30 suicide bombing against a remote CIA base that killed seven of the agency’s employees in Afghanistan’s Khost province.

“The Haqqani network has been pretty lethal bringing out the suicide bombers. This is probably their handiwork today,” he told reporters, adding that at least 15 similar attempts had been foiled over the past few weeks.

“Today’s attack by the Taliban in Kabul is yet another example of their brutality and contempt for the Afghan people,” said Gen. Stanley McChrystal, the top commander of U.S. and NATO forces. “Afghan national security forces effectively dealt with the situation and should be commended. We convey our heartfelt condolences to the innocent victims of this cowardly attack.”

Abdul Rahman Hamedi, 38, lamented the violence in the capital at a time when fresh international forces are being sent to southern and eastern Afghanistan, where fighting has been particularly intense.

“Today it looks like a coup,” said Hamedi, who ran with his son from his shop. “Everybody said `The city is full of suicide bombers.”’

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