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Afghan police officers take position during a blast and gun fire in Jalalabad, Afghanistan January 24, 2018.REUTERS/Parwiz

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By Rafiq Sherzad and Ahmad Sultan

JALALABAD, Afghanistan (Reuters) - Gunmen stormed an office of the Save the Children aid agency in Afghanistan's eastern city of Jalalabad on Wednesday and battled security forces surrounding the building, killing at least two people and wounding 20, officials said.

Islamic State claimed responsibility for the attack, which began with a suicide car bomb outside the office about 9 a.m., followed by gunmen entering the compound. Schoolchildren and residents fled as Afghan Special Forces arrived to engage the attackers.

"There was a blast and the target was Save the Children," said Attaullah Khogyani, a provincial government spokesman. "Attackers entered the compound and the fight is going on."

Some witnesses said there appeared to have been at least four attackers in police uniform, a commonly used tactic, but there was no immediate official confirmation.

Provincial health officials said 20 wounded people had been taken to hospital.

As security forces fought their way in, they recovered one body inside the compound but its identity was not clear. A member of the security forces was also killed.

"An explosion rocked the area and right after that children and people started running away," said Ghulam Nabi, who was nearby when the bomb exploded. "I saw a vehicle catch fire and then a gunfight started."

Islamic State said the attack targeted British, Swedish and Afghan government institutions, in a statement on its Amaq news agency. A Swedish aid group office and a building of the Afghan Department of Women's Affairs are near the compound.

The attack underlines how difficult operating in Afghanistan has become for humanitarian aid bodies, which have faced heavy pressure from armed groups and kidnappers.

In October, the Red Cross said it was drastically reducing operations in Afghanistan following attacks that killed seven of its staff last year.

"An attack against an organisation that helps children is outrageous. Civilians and aid workers must not be targeted," said Monica Zanarelli, head of the Red Cross delegation in Afghanistan. "Increased violence has made operating in Afghanistan increasingly difficult for many organisations."

TALIBAN DENY RESPONSIBILITY

Plumes of black smoke rose from the area as surviving gunmen battled special forces well into the afternoon.

A police official said at least one attacker had blown himself up in the initial suicide assault and another had been killed but it was not clear how many survived and continued to resist.

It was also not immediately clear what had happened to Save the Children staff in the building when the attack began.

"We are devastated at the news that our Save the Children office in Jalalabad city, Afghanistan, came under attack this morning as armed men entered the building, about 9 a.m.," a group representative said in an emailed statement.

"Our primary concern is for the safety and security of our staff. We are awaiting further information from our team."

Jalalabad is the capital of Nangarhar province on the porous border with Pakistan. The province has become a stronghold of Islamic State, which has grown into one of Afghanistan's most dangerous militant groups since it appeared around the beginning of 2015.

Backed by intensive U.S. air strikes, Afghan forces have claimed growing success against the Taliban and other militant groups, including Islamic State, but militant attacks on civilian targets have continued, causing heavy casualties.

The attack in Jalalabad came just days after Taliban militants attacked the Hotel Intercontinental in the capital, Kabul, killing at least 20 people, including 13 foreigners.

(Additional reporting by Eric Knecht in CAIRO; Writing by Robert Birsel; Editing by Nick Macfie)

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Reuters