Blasts and heavy shooting shook the Syrian capital, Damascus, late on Tuesday, Arab television stations reported.
Al Jazeera television said the blasts and shooting were heard from a western district of Damascus where it said the British ambassador's residence and the Saudi embassy are located.
Al Arabiya quoted its correspondent as reporting explosions were heard in the city. They gave no further details.
Syrian television reports said that Syrian security forces clashed with a "terrorist band" late Tuesday in Damascus, after the blasts.
Police cordoned off the area, and electricity was cut off in the area. Several Western embassies are in the neighbourhood.
Syrian television said in an news flash that a "terrorist group" was responsible for the explosions, and security forces were in control of the situation.
Al-Jazeera later said Syrian security had arrested one attackers, who used hand grenades and machineguns.
Lebanese security sources in Beirut said one explosion was heard next to the Australian embassy.
"Electricity is cut off in the area of and streets look deserted," one resident told Deutsche Presse-Agentur by telephone.
"Gunfire is still heard and sirens of rushing ambulances are echoing through the capital," the resident added.
A British Foreign Office spokeswoman in London said the explosion took place on a street close to the Iranian Ambassador's residence.
"It is closer to the Iranian ambassador's residence than it is to our ambassador's residence... (There were no) injuries to UK embassy staff but our staff are in the process of assessing the situation," he said.
"There was no damage to the British embassy."
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