By Gibran Naiyyar Peshimam

KABUL (Reuters) -Taliban government forces destroyed an Islamic State cell in the north of Kabul late on Sunday in a prolonged assault that broke the calm of a normally quiet area of the capital with hours of explosions and gunfire, officials and local residents said.

With Afghanistan’s economy close to collapse and large areas of the country in danger of famine, the presence of an apparently well-armed militant cell in Kabul underlined the daunting scale of the challenge facing the new government.

The Taliban operation came after a bomb attack near a mosque in Kabul earlier on Sunday that was later claimed by Islamic State. That blast killed and wounded a number of civilians in what appeared to be the worst attack in the Afghan capital since the withdrawal of U.S. forces at the end of August.

The local affiliate of Islamic State, known as ISIS-Khorasan after an ancient name for the region, has already claimed to have carried out attacks on Taliban targets and remains unreconciled to the Afghan Islamist movement.

Taliban spokesperson Zabihullah Mujahid said a special Taliban unit carried out an operation against ISIS elements in Kabul’s 17th district, in the city’s north, destroying their base and killing all those in it.

Local residents said the Taliban forces cordoned off the area before beginning their assault at around 7.30 p.m., before a firefight that lasted several hours, interrupted by at least two blasts as the suspected ISIS fighters detonated explosives.

“For about three hours the clashes were very intense and several powerful explosions also took place,” said Hashmatullah, a local shopkeeper.

One local resident, who asked not to be named for security reasons, said a final blast occurred at around 11.30 p.m. when an explosives-packed car blew up, apparently killing all the ISIS fighters in the building where they were holed up.

He said sporadic gunfire could be heard late into the night and early morning near the compound.

As pickup trucks carried furniture and other items out of the partially destroyed compound on Monday, Taliban soldiers sealed off the area, ushering away bystanders.

LINGERING SECURITY THREATS

The Taliban, who are also fighting the remnants of forces loyal to Ahmad Massoud, an opposition leader from the Panjshir region north of Kabul, have said they have almost complete control of the country.

But Sunday’s violence, and a string of smaller incidents in recent days in areas including Nangarhar on the border with Pakistan and Parwan north of Kabul, have shown that security threats have not disappeared.

Islamic State’s Amaq news agency said on Telegram the group carried out the mosque bombing.

IS has also claimed responsibility for bomb attacks in the eastern city of Jalalabad as well as a suicide attack in late August that killed 13 U.S. soldiers and scores of Afghan civilians who were crowded outside the Kabul airport gates, desperate to secure seats on evacuation flights.

Samiullah, a resident of Kabul who runs a street vendor cart near the mosque, said that, initially, even if the economic situation had worsened since the Taliban takeover, the improved security situation was a consolation.

“We regret that the situation has gone from bad to worse,” he told Reuters close to the mosque premises after being ordered to move away from his usual spot. “The situation is not normal yet. No one is allowed in this area except for the Taliban.”

(Editing by James Mackenzie and Mark Heinrich)