The hotel was attacked by the Taliban in 2011.
Rahimi said the first and second floors of the hotel have been secured by Afghan forces, who are now trying to clear the fourth and fifth floors.
"Four attackers are inside the building", an official at the Afghan spy agency said.
It is believed there are at least two more gunmen still in the hotel, where a fire has broken out on the third floor where the kitchen is located.
The Intercontinental Hotel in Kabul was previously targeted in 2011. Credit Reuters
"The operation will soon end and the attackers will be killed", interior ministry spokesman Najib Danish told AFP.
After repeated attacks in Kabul, notably an incident in May past year in which a truck bomber outside the German embassy killed at least 150 people, security has been further tightened in government and diplomatic areas. "According to initial reports, no Resolute Support or (US forces) members were injured in this incident", he said in an emailed statement.
Even before Saturday's attack was over, authorities were questioning how the assailants got past the hotel's security, which was taken over by a private company two weeks ago, Danish said. The Department said it had received reports of "extremist groups" planning a hotel attack in the capital, "such as [on] the Hotel Baron near Hamid Karzai Int'l Airport". One was killed by Afghan security forces and three others are still battling the forces from inside the hotel, he added.
The State Department said it was monitoring the situation and was in contact with Afghan authorities to determine whether any U.S. citizens had been affected.
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