Fighting erupted when the Islamic attackers detonated two vehicles loaded with explosives in Ghazni province in eastern Afghanistan, the Afghan interior ministry said.
Deputy governor Mohammad Ahmadi told Efe that the assailants targeted Afghan intelligence headquarters in the three-hour clash with security forces.
The dead included ten police officers and all 21 members of the Taliban unit that took part in the assault, while 130 of those wounded in the firefight were civilians and 17 were police officers.
The Taliban claimed responsibility for the attack in a Twitter post.
Afghanistan has been going through one of its bloodiest periods since Afghan forces began taking over responsibility for security last year to gradually replace the NATO-led International Security Assistance Force (ISAF), which will end its mission by the end of 2014.
Despite the withdrawal of the NATO contingent, the United States has announced that it plans to keep 9,800 soldiers in the country until the end of 2016.