16 killed as Taliban attack Afghanistan's Ghazni city (Lead)

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Ghazni (Afghanistan) : At least 16 people were killed as the Taliban launched a brazen attack on the strategic Afghan city of Ghazni in the early hours of Friday, seizing a number of key buildings and trading fire with security forces.

Afghan soldiers fought back as the heavily-armed militants converged from four sides of the city. Ghazni public health director Zahir Shah Nikmall confirmed the toll and said at least 40 people were injured, the majority of them Afghan security forces, CNN reported.

The clashes, according to provincial police chief Farid Ahmad Mashal, erupted after hundreds of Taliban insurgents stormed important government entities including National Directorate for Security (Afghanistan's Inteligence Agency) and provincial governor's office.

The militants later retreated from their positions and operations were underway to wipe out militants from in and around the city, said Mashal.

Ghazni, the capital of the province of the same name, is less than 100 miles to the south of Kabul. It lies on the Kabul-Kandahar highway, an important artery connecting the capital to the country's southern provinces and some of its western ones.

American forces responded with attack helicopters and a drone strike, according to US Forces Afghanistan spokesman Lt. Col. Martin O'Donnell.

Taliban spokesman Zabiullah Mujahid said in a statement that hundreds of fighters armed with heavy and light weapons entered Ghazni city around 1 a.m., capturing a number of strategic sites within the city and killing more than 140 Afghan soldiers.

However, the US disputed that figure, saying initial reports indicated there were "minimal Afghan security force casualties".

Afghanistan called the attack a "failed attempt" to seize territory "while creating strategically inconsequential headlines".

The Ghazni attack was the second assault on an Afghan city this year. In May, insurgents overran the western city of Farah, but they left a day later amid counterattacks from the Afghan government and American airstrikes.

Friday's assault could imperil any chances of a potential ceasefire between the government and Taliban for the Eid ul-Adha festival in less than two weeks time.

Earlier, seven people were killed in Kabul in a suicide attack on a ministry in June, and a further 14 people were killed in a suicide bomb attack near Hamid Karzai International Airport in July.

The ongoing violence came amid the release of a UN report stating the number of Afghan civilians killed in the first six months of this year has reached a record high.