Suicide attackers on Monday blew up a truck bomb and raided UN and US charity offices in Kandahar city, killing five Afghans in the latest major attack on American interests in Afghanistan.

The bombers struck outside a compound housing offices of the UN and US-based International Relief and Development (IRD) in Kandahar, as Turkey gears up to host a major conference designed to quicken efforts to end the 10-year war.

The bombing came two days after 17 people died in the deadliest attack yet in Kabul against the US-led NATO mission, including 10 Americans, and three days after a US-run base in Kandahar was targeted.

One attacker detonated the vehicle outside the buildings, killing one unarmed watchman, before three others entered the joint compound, shooting dead three other guards, said provincial police chief Abdul Raziq.

He said the attackers holed themselves up in a veterinary clinic and fired on security forces, also killing a local district police chief before they were themselves shot dead after more than six hours.

"Fighting is over, all the attackers are dead. Search operations are ongoing," said Raziq.

Taliban spokesman Yousuf Ahmadi said the insurgent group carried out a car bomb attack in Kandahar -- the Taliban's former capital -- claiming the UN refugee agency was the target.

A Western diplomat told AFP that the target was still unclear.

"At this point we are not sure if UNHCR in Kandahar or if the IRD compound was the target. They're adjacent to one another," he said.

The volatile city is the largest in southern Afghanistan and the birthplace of the Taliban, who have been fighting for a return to power since being ousted by the US-led invasion in late 2001 that followed the 9/11 attacks.

There is widespread acceptance that there can no battlefield victory in the war, with Western diplomats urging talks to negotiate a political settlement ahead of two international conferences aimed at making long-term plans.

President Hamid Karzai on Monday left for Istanbul, for a regional conference on Wednesday at which he will announce a second wave of areas in up to 17 provinces that will soon be handed over from NATO to Afghan control.

That will mark the second stage of a transition process that began in July and is scheduled to see Afghans take responsibility for national security by the time that NATO winds down its combat mission in the end of 2014.

The conference talks will cover "political, economic and security issues", Karzai's office said. He was expected to meet his Turkish counterpart Abdullah Gul and US Secretary of State Hillary Clinton on the sidelines.

Clinton says Washington is now pursuing a three-pronged strategy of "fight, talk, build", but with the Taliban mounting a series of high-profile deadly attacks, there has been little public evidence of their willingness to talk.

The bodies of the dead from Monday's Kandahar siege were taken to the nearby Mirwais hospital along with several people wounded in the assault.

Sardar, a doctor at Mirwais hospital, said that apart from the dead, another five people including a Nepalese guard had been admitted with injuries.

According to its website, IRD provides nearly $500 million annually in development assistance to Africa, Asia, Eastern Europe, Latin America, and the Middle East; and works in nearly 40 countries.

The Kandahar area was the focus of a US-led military "surge" of thousands of extra troops ordered into Afghanistan by President Barack Obama in late 2009 as part of a last-ditch military effort to reverse Taliban momentum.

On Friday, the Taliban launched a major assault on a US-run civilian-military base in Kandahar, sparking a four-hour siege that left one Afghan interpreter dead and eight other people wounded.