Afghan forces have freed 18 civilians and two militants after a Taliban attack on a popular lakeside hotel outside Kabul, but the siege continues and more hostages may be held, the city police chief said Friday.

Two terrorists have been killed and we have cleared the second floor of the hotel. We are now clearing the area of the remaining insurgents, Kabul Police Chief Ayoub Salangi told Reuters.

Our officers have not gone yet to the lake side (of the hotel) and we don't know if there are more terrorists, he said.

Earlier, police said said they were taking care not to endnager civilians.

It would be very easy for police to kill them, but we are afraid because there are civilians, including women and children, trapped inside. We are waiting for daylight, Gen. Mohammad Zahir, head of the Kabul police investigation unit, told Reuters.

According to the information we have, they have martyred some of them, he said, meaning an unknown number of civilians had been killed.

Insurgents armed with RPG rockets, and heavy and light weapons, are inside the Spozhmai Hotel and fighting with security forces. We don't know their numbers and if there have been casualties, Zahir said earlier.

Zahir told AFP the attack began around 11:30 p.m. Thursday, when suicide attackers armed with rockets and Kalashnikov rifles stormed a gathering at the Hotel. At least one of the attackers detonated his explosive suicide vest, he said.

Kabul deputy police chief Daoud Amin said that according to hotel guards, there were three attackers inside the hotel, as well as numerous civilians.

Zahir said there was a private party for wealthy Afghans underway inside the hotel when the attack began. Many guests jumped into Lake Qargha to escape.

The attack had been under way for more than four hours as dawn broke over Kabul.

The Afghan Taliban claimed responsibility for the attack, Reuters reported, saying wealthy Afghans and foreigners used the hotel in the Qargha Lake district to have wild parties in the leadup to the Friday holy day of Islam.

Attacks across Afghanistan have surged in recent days, with three U.S. soldiers and more than a dozen civilians killed in successive attacks, mostly in the country's east, which has so far been a focus for NATO-led forces during the summer fighting months.

President Hamid Karzai said in a speech to a special session of parliament on Thursday that attacks by insurgents against local police and soldiers were increasing as foreign combat troops prepare to exit the country in 2014.

Insurgents attacked Kabul's heavily-protected diplomatic and government district on April 15 in an assault eventually quelled by Afghan special forces, guided by Western mentors.