Taleban insurgents took siege on a resort yesterday, killing fourteen Afghan civilians, three security guards and an Afghan police officer.

A team of five insurgents armed with rocket launchers and guns killed the security guards at the lakeside hotel, before storming inside and opening fire on dining guests.

Some were able to escape while others were held hostage during the 12-hour battle with Afghan security forces, who rushed to the scene.

Police Chief Mohammad Ayub Salangi said the five attackers, armed with machines guns, rocket-propelled grenades and vests laden with explosives, stormed the Spozhmai hotel at Qargha Lake at about 6.30am NZT.

About nine hours later, militants were still fighting Afghan forces, supported by international troops.

Media in the United States, including the Los Angeles Times, incorrectly reported New Zealand's SAS aided the Afghan forces in the rescue operation. The SAS mission in Afghanistan ended in April, and the troops were actually Norwegian.

Taleban spokesman Zabiullah Mujahid said the Taleban attacked the hotel because foreigners there were drinking alcohol and participating in other activities banned by Islam, but that was disputed by the Kabul police.

Kabul police said security at the lake was light compared with targets inside the Afghan capital. while the resort had armed guards, there were no blast walls or security cordons that surrounded government and military buildings in the heart of Kabul. Zahir said only two of the three guards killed at the hotel were armed.

Kabul police criminal director Mohammad Zahir told foreign press people did whatever they could to escape the bloody siege.

"The hotel was crowded. Some of the guests jumped from the window into the hotel yard. They were hiding under trees or any safe place they could find.

"Three of the guests jumped into the lake and hid in the water,'' he said.

All five attackers had been shot and killed by midday (local time), ending the standoff.

Afghan President Hamid Karzai condemned the incident, which took place a half-hour drive from the capital.

The attack was the latest in a string of incidents over the past week as insurgent groups appear to be ramping up their offensive rather than waiting for international forces to pull out. Fears are now mounting that insecurity will spin out of control as NATO troops prepare to withdraw by 2014.

On Wednesday, a suicide bomber attacked US and Afghan forces at a checkpoint in a busy market in the east, killing 21 people, including three US soldiers. The same day, seven Afghan civilians were killed by a roadside bomb.

Those bombings came a day after two attacks in the south, in which militants stormed a NATO military base and attacked a police checkpoint.

US troops were wounded in the attack on the NATO base, officials said.

On Monday, three gunmen dressed in Afghan police uniforms killed one American service member and wounded nine others in Kandahar's Zhari district.

The commander of US and NATO forces in Afghanistan, Marine General John Allen, has to withdraw 23,000 American troops by the end of September, leaving about 68,000 US military personnel in the country.

New Zealand troops, including the SAS, have been based in Afghanistan since 2003. About 145 New Zealand troops remain in Afghanistan, but they are to pull out next year.