SANA, the official Syrian news agency, said a group of assailants had set off an explosive device at a United Nations office. Dubai-based television network Al-Arabiya reported that the building was in flames.
SANA quoted a Syrian security official as saying, "A subversive armed group opened fire at random this evening in the Mazza area and was confronted by the relevant security apparatus."
Al-Arabiya reported that the explosions took place at 8 p.m. local time in an upscale area of western Damascus that houses the Canadian and Iranian embassies, the Saudi consulate, the British ambassador's home and the Iranian state news agency's offices. The network reported that another blast occurred at a shopping center nearby.
Residents said security services had battled militants armed with grenades and assault rifles. The Al-Jazeera news network reported that car bombs were used in the attack.
Imad Mustafa, Syria's ambassador to the United States, told CNN that one of the militants was killed and another was captured in the battle.
"We've being doing our best against al-Qaida. We share the same enemy (as the United States). We aid the U.S. in its fight against al-Qaida and terrorism," Mustafa said.
Reuters quoted a diplomatic source as saying, "The assailants fired bullets at the British ambassador's residence, but it seems the main target was the United Nations building."
British ambassador to Damascus, Peter Ford, responded to the news agency, saying the attack had not targeted the British embassy.
"This is absolutely not true, there is no threat to any British interest in what happened," Ford told Reuters. "We heard explosions and exchanges of fire, but we are safe."
Syria has been largely peaceful since Bashar al-Assad took power in 2000 and imposed heavy security throughout the country.
The country has been on the U.S. list of state sponsors of terrorism since the list was created in 1979. The United States, which believes the country is supporting anti-Israeli groups such as Hamas and Hezbollah, has imposed export sanctions on Syria, and the country is ineligible for most forms of aid from the United States.
Syria, however, says it has an interest in containing the actions of extremist Islamic groups, such as al-Qaida, and that the anti-Israeli groups it sponsors are not terrorist.