A series of attacks in the Afghan capital Kabul were in retaliation for Koran burnings, a US Marine urination video and the Kandahar massacre.
At least seven sites across the heavily guarded city were attacked, raising worrying questions about the Taliban's apparently undimmed ability to wreak havoc despite intense US efforts to degrade them on the battlefield.
Taliban insurgents claimed responsibility for the assault, one of the most serious on the capital since U.S.-backed Afghan forces removed the group from power in 2001.
Afghan media said insurgents had stormed the Star Hotel complex near the presidential palace and the Iranian embassy. Windows of the hotel were blown out and smoke billowed from the building.
Attackers fired a rocket-propelled grenade that landed just outside the front gate of a house used by British diplomats in the city centre and smoke billowed from the area after the blast, a Reuters witness said.
A few others Taliban militants armed with heavy weapons positioned at a newly-build building are targeting Afghan parliament at the Darul Aman area of Kabul. The battle is ongoing between Afghan and Taliban militant forces.
At least two attackers were killed and five people wounded in the Kabul, where fighting was still raging hours after it began.
British embassy sources said staff were in a lockdown.