Gunmen stormed a provincial council building in the city of Tikrit north of Baghdad on Tuesday, immediately after a suicide bomber detonated his payload and cleared the way, police said.
"A suicide bomber detonated his explosives belt outside the provincial council building in Tikrit, and immediately after gunmen stormed into the building," a police official told AFP.
"All the employees are still in the building, and police cannot approach because the gunmen are shooting from inside," he said.
A car bomb exploded near the main building when back-up forces arrived, the official said. He said that a curfew had been imposed in Tikrit, which is in Salaheddin province.
Witnesses said that employees had in fact managed to flee the building from another exit, but police said the situation was unclear.
The suicide bombing occurred at 1:00 pm (1000 GMT), and the car bomb exploded about 20 minutes later, the police official said.
Tikrit, about 160 kilometres (100 miles) north of Baghdad, is the hometown of Saddam Hussein, the Iraqi dictator ousted in the 2003 US-led invasion and later tried and hanged.
In mid-January, a suicide bomber blew himself up and killed 50 people in a crowd waiting outside a police recruitment centre in Tikrit.
That blast, which also wounded up to 150, was the first major strike in Iraq since the formation of a new government on December 21.
Iraq's security forces are now solely responsible for the country's security, with the United States having declared a formal end to combat operations in the country at the end of August.
Violence across Iraq has declined substantially since its peak in 2006 and 2007, but attacks remain common.