"A teenaged girl was killed in first blast on the street and one security guard was wounded in the incident," Deputy Interior Minister in charge of security Mohammad Ayoub Salangi said in his Twitter account.
The guest house offers residence to staff of the Roots of Peace, a non-governmental organisation, helping farmers improve agriculture in the war-hit country. It is supported by a US aid agency.
The attack began around 4 pm after a militant exploded a car bomb, enabling four others to get into the compound, Xinhua reported.
The Taliban failed this time to cause massive civilian casualties, a witness told Xinhua. The Afghan Special Forces had worked very professionally, he said. The blast also damaged several houses in the residential area in western Kabul.
The building caught fire following the exchange of fire which lasted for nearly four hours.
More than 10 foreigners were rescued by security forces shortly after the attack.
Since early this year, the Taliban insurgent group had launched several attacks on civilian targets.
Local analysts say that the Taliban have changed their tactics by avoiding direct conflicts with troops and shifting the attack on soft targets such as civilians and government agency buildings and infrastructure in a bid to challenge the security forces.
The militants carried out attacks on two popular restaurants in Kabul earlier this month and in January, killing 30 people. Two dozen foreigners and an Afghan journalist, along with his wife and two children, were killed in the attacks.
The attacks come as the country is preparing for the presidential and provincial councils general elections slated for April 5.
The Afghan security forces are taking over security from more than 52,000 NATO-led foreign troops who are set to leave the country by the year-end.