A nearby building known to house a CIA base also came under attack as explosions and gunfire erupted for more than an hour in an area close to heavily secured Western embassies and ministry buildings.
Three Afghan security guards and all four assailants were killed, officials said.
It was one of the most brazen assaults on the city since President Hamid Karzai narrowly escaped assassination in April 2008 when the Taliban attacked an annual military parade.
Two four-wheel-drive cars using fake badges from NATO's International Security Assistance Force (ISAF) tried to pass through a checkpoint to access the sprawling palace grounds at about 0200 GMT.
"The first vehicle was checked and let in, and as the second car tried to get in the guards became suspicious and tried to prevent it," Mohammad Daud Amin, the Kabul deputy police chief, told AFP.
"The clash started and the cars were detonated. All the attackers were killed."
The car bombs detonated near the CIA base inside the first of several layers of outer checkpoints, but a government official told AFP that the militants had not entered the palace grounds.
The challenge of securing peace in Afghanistan as NATO troops exit next year was underlined when a bomb killed eight women and one child travelling to celebrate a wedding in the southern province of Kandahar.
Karzai, who lives in the palace, was due to hold a press event in Kabul this morning. Officials confirmed that he was in the building at the time of the attack but not in danger.
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