KUNDUZ, Afghanistan (NYTIMES) - Taleban militants have launched an attack from several directions on the northern Afghan city of Kunduz, which they have occupied twice in recent years, even as the insurgents seemed close to a preliminary peace agreement with US diplomats.

Residents said on Saturday morning (Aug 31) that heavy fighting had been under way in several corners of the city since before dawn and that the streets were largely deserted.

Mr Ehsanullah Fazli, the health director for Kunduz province, said the militants had taken over his department's headquarters in the city.

He said three bodies and 18 wounded people had been taken to hospitals so far.

Security officials confirmed that Afghan forces were fighting off assaults in at least three parts of the city and that at least two police precinct offices were taking fire from the Taleban.

"Clashes have been ongoing from four directions," Mr Sayid Sarwar Hussaini, a spokesman for the Kunduz police, said.

Residents, caught by surprise, rushed to stock food and other essentials, to find only a small number of shops open. Then even those shops began to close their doors.

"It was around 2am (5.30am Singapore time) when we started hearing heavy firing," said Rahmatullah Rahimi, 52, a Kunduz resident who sells firewood.

"With each rocket, our windows would shake. Neither I nor our neighbours have slept all night. How can you sleep with the sound of fighting? We are trying to see whether we should flee or stay."

The attack comes as Taleban officials and US negotiators continue marathon talks in the Qatari capital of Doha on finalising a preliminary peace deal. Talks were scheduled to resume on Saturday morning.

The deal is expected to finalise a timeline for the withdrawal of the remaining US and Nato forces in the country and to open the path for direct negotiations between the Taleban and the government over the political future of the country.

But the violence in Afghanistan has intensified even as the talks have continued.