DAMASCUS, April 27: Explosions and gunfire rocked the Syrian capital on Tuesday as security forces battled with militants, authorities and witnesses said. There were widely conflicting reports of what had happened in the usually calm city.

"There were at least two terrorists. One was killed and another one injured after they detonated an explosive device... and destroyed at least three vehicles," a diplomatic source told Reuters. He said the blast set a United Nations building ablaze, but a Reuters witness who visited the scene said that while the building had long been used by the UN, it was now a civilian residence.

The house was very close to the Canadian embassy. Local residents said security services had fought a running battle with militants armed with rocket-propelled grenades and assault rifles. The area was now calm and emergency services had extinguished the blaze.

Syria said its security forces had fought an armed group that opened fire in the upmarket Mazze diplomatic district. "A subversive armed group opened fire at random this evening in the Mazze area and was confronted by the relevant security apparatus," the state news agency SANA quoted a Syrian security official as saying. "The situation is totally under control."

The British, Saudi, Canadian and Iranian embassies are among the diplomatic missions in the Mazze district of Damascus. "We were working in the library and heard lots of gunfire and explosions," said one foreign student in Damascus close to the scene of the explosions.

"Everyone was terrified and we ran out of the building to see what was happening," he told Reuters. Ambulances and other emergency vehicles rushed to the scene and heavy security was in place throughout the city.

Two trucks with riot police were stationed in the ancient city's main square and near the state television building. "The assailants fired bullets at the British ambassador's residence but it seems the main target was the United Nations building," the diplomatic source said. But the British ambassador said his embassy was not a target.