Attackers used a rocket-propelled grenade to storm the complex

Save the Children has suspended its operations across Afghanistan.

This suspension was announced as Islamic State militants continued to terrorise 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 programmes across Afghanistan have been temporarily suspended and our offices are closed."

After blowing up a car outside the charity's compound, the attackers used a rocket-propelled grenade to storm the complex in a raid claimed by IS 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.

Earlier, spokesman Attaullah Khogyani said at least two people had been killed and 14 wounded, and that the attackers were wearing military uniforms.

The AFP reporter said he could see security forces standing on the street trying to enter the compound.

Mohammad Amin, who was inside the compound when the attackers launched the raid, told AFP from his hospital bed that he heard "a big blast".

"We ran for cover and I saw a gunman hitting the main gate with an RPG (rocket-propelled grenade) to enter the compound. I jumped out of the window," Amin said.