Syrian forces killed three armed men and wounded another on Tuesday after an attack on the U.S. Embassy in Damascus in which a car was blown up and gunfire exchanged with guards.

Syrian Interior Bassam Abdel Majid, in a report carried on state run television, said the incident appears to have been a "terrorist attack" aimed at the U.S. Embassy. The Interior Ministry oversees police forces in Syria.

"Investigations are underway to find out more details," Majid told Syrian Television.

There were no American deaths in the attack, according to a Syrian who works at the U.S. Embassy, but a stray bullet injured a Chinese diplomat who was standing on top of the Chinese Embassy building nearby, the official Chinese Xinhua News Agency reported.

The diplomat was taken to hospital for treatment. Both embassies are in the diplomatic district of the Syrian capital.

In Washington, the U.S. State Department confirmed that an attack occurred on the U.S. Embassy, saying the people involved were "unknown assailants" and the incident is over.

"Local authorities have responded and are on the scene," said Kurtis Cooper, a State Department spokesperson.

Television footage of the scene showed a bombed out car.

A witness who spoke on condition on anonymity told the Associated Press that two armed men stopped a car on the street in front of the embassy, got out of the car, shot at the Syrian guards in front of the entrance to the embassy and then blew up the car.

The guards shot back, and security forces in the area moved quickly to the street, said the witness.

The Canadian Embassy is about two kilometres away from the American building. A Canadian official said embassy employees are assessing the situation.