"Four attackers are inside the building," an official at the Afghan spy agency told AFP.
They are "shooting at guests", he said.
The fourth floor of the hotel is on fire, the official from the National Directorate of Security added.
Occupants inside the hotel are hiding on the second floor, a security source said.
A guest hiding in his room in the hotel told AFP he could hear gunfire.
"I don't know if the attackers are inside the hotel but I can hear gunfire from somewhere near the first floor," he said without giving his name.
"We are hiding in our rooms. I beg the security forces to rescue us as soon as possible before they reach and kill us."
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The Intercontinental was last targeted in June 2011 when a suicide attack killed 21 people, including 10 civilians.(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
