The well-coordinated attack by the militants began with one of them exploding a car full of explosives with him near the gates of the municipal building. While police were distracted by the explosion, three men wearing camouflage fatigues and carrying AK-47 assault rifles and explosive belts entered the building.
The police opened fire on the assailants, killing two, while the third managed to set off the explosives on his belt.
The attack is the latest in an apparent campaign targeting government offices. On Monday, a suicide bomber blew himself up near an administrative building in Dun district, some 15 km (10 miles) south of the city of Kandahar, killing five policemen and three civilians.
More than 2,100 Afghan civilians were killed last year, by both extremist groups and the U.S.-led coalition troops, according to official statistics.
The Taliban regime was ousted by the U.S.-led invasion in 2001, but the Central Asian state has experienced a rise in violence in recent years, with skirmishes and suicide bomb attacks being reported daily.
The United States plans to send thousands of more troops into the country to try to reverse the Taliban insurgency.
