Karzai and his ministers ran for cover after gunfire erupted at the celebration to mark the 16th anniversary of the fall of the Afghan communist government to the mujahideen.

Karzai later appeared on state television. The Taliban, which claimed responsibility for the attack, said three of its fighters were killed. British ambassador Sir Sherard Cowper-Coles was standing on the front row of the dais alongside the US envoy to Kabul.

“It was coming to the end of the 21-gun salute. I saw an explosion and a puff of dust to the left of the parade and then heard the crackle of small arms fire from all directions,” Sherard said.

All cabinet members and foreign diplomats present at the parade along with General Dan McNeill, US commander of international forces in Afghanistan, were safe and well, a spokesmen said.

But one person was killed and 11 wounded, including a member of parliament, a Defence Ministry spokesman said.

The Taliban firing came from a building a few hundred metres from the presidential palace. “Three of our attackers have been killed and three managed to escape. Small arms and RPGs were used in the attack,” Taliban spokesman Zabihullah Mujahid said.

According to Mujahid, although Afghan and NATO authorities repeatedly said the Taliban are on the verge of annihilation, it is has been proved that the Taliban not only have the ability to operate in the provinces, but even in Kabul. “Karzai and his cabinet can't be safe from Taliban attacks,” he said. Immediately after the attack, bandsmen in full dress uniform mingled with ordinary soldiers trying to get out of the line of fire.

Other soldiers and Karzai’s bodyguards, dressed in black, took up positions. Karzai has survived many assassination bids.