Afghan security forces battled gunmen following a suicide attack outside the Iraqi embassy in the capital, Kabul.
A bomber blew himself up at the gate of the embassy in the central Shar-e-Naw neighbourhood, then three other attackers entered the compound, the Afghan interior ministry said.
Although the ministry said the siege had ended, reports of gunfire continued.
So-called Islamic State (IS) said it carried out the attack.
Kabul has seen a number of deadly assaults this year blamed on either IS or the Taliban.
Correspondents say this is the first attack on the city’s Iraqi embassy. It comes two weeks after the embassy held a news conference to celebrate the defeat of IS in the Iraqi city of Mosul.
Pictures on social media show black plumes of smoke rising into the sky over Kabul.
After a gunfight lasting several hours, the Afghan interior minister said the attack was over and all the assailants had been killed.
However, Afghan TV quoted sources as saying that one was still alive inside the embassy and exchanging fire with security forces.
Meanwhile, full casualty figures are unclear. The Afghan ministry said one Afghan policeman was injured but all embassy staff were safely evacuated.
The Iraqi foreign ministry said that although its top diplomat in Kabul had been taken safely to the Egyptian embassy, attempts were under way to remove two other embassy employees. It added that two Afghan guards of the embassy were dead.
According to the United Nations, Afghanistan has seen at least 1,662 civilian deaths in the first half of the year, with about 20% of those in the capital.
Last Monday a suicide car bomb killed at least 30 people in a mainly Shia district of Kabul. The Taliban said they carried out that attack.
On 31 May, a huge bombing in the centre of the city killed more than 150 people, the deadliest militant attack in the country since US-led forces ousted the Taliban from power in 2001.
The violence underlines the precarious security situation in Afghanistan as US President Donald Trump weighs up whether to increase the number of US troops aiding the military and police in the country.
IS announced the establishment of its Khorasan branch – an old name for Afghanistan and surrounding areas – in January 2015. It was the first time that IS had officially spread outside the Arab world.
