Save the Children suspended its operations across Afghanistan on Wednesday as Daesh terrorists continued to terrorize staff trapped inside an office in the country's east, in the latest attack on a foreign charity.

More than seven hours after gunmen blasted their way into the British charity's compound in Jalalabad city, killing at least two people and wounding 14 others, the attack was ongoing -- despite an official declaration that the assault was over.

"Save the Children can confirm that the security incident affecting our office in Jalalabad, Afghanistan is still ongoing," a spokesperson for the aid group said in a statement.

"In response to this all of our programs across Afghanistan have been temporarily suspended and our offices are closed."

After blowing up a car outside the British charity's compound in Jalalabad city, the attackers used a rocket-propelled grenade to storm the complex, in a raid claimed by Daesh via its propaganda arm Amaq.

A spokesman for Nangarhar province's governor said earlier that security forces had swarmed the compound and brought the assault to an end, but an AFP reporter at the scene could still hear gunfire. A security source also told AFP the attack was still ongoing.

Attahullah Khogyani, spokesman for the provincial governor, said the attack targeted Save the Children's provincial office in Jalalabad.

Khogyani said a police officer and a civilian were killed in the attack. One insurgent carried out a suicide bombing, a second was killed by police and a third was still fighting, he said.

Inamullah Miakhial, spokesman for Nangarhar regional hospital, said at least 14 wounded were brought to the hospital. The casualty count could rise as a gun battle was still underway, he said.

The attack started with the suicide bomber and was followed by gunfire, said Khogyani.