Officials say the assailants set off a suicide car bomb in the town of Baqouba. Shortly after, gunmen stormed the compound and began shooting.
There were no immediate claims of responsibility, but the spokesman for Iraq's defense ministry blamed al Qaeda for the attack. There are are conflicting reports about whether the situation is now under control, and whether the assailants who died were killed by Iraqi security forces or blew themselves up.
The assault raised questions about how prepared Iraqi security forces are to protect the country when American troops leave by the end of this year.
"The aim of such an attack is to create more chaos and to hinder any attempts to push the country forward," said Abdullah Hassan, a member of the provincial council that had been scheduled to meet at the site Tuesday morning. He said that gathering was to start roughly an hour after the attack began but had been delayed.
Violence in Iraq has dropped dramatically since the most vicious of the Shiite-Sunni sectarian fighting just a few years ago. But militant groups have demonstrated their continued capability to carry out violent attacks.
Two U.S. soldiers died Monday during operations in southern Iraq, U.S. military officials said. The soldiers were not identified pending notification of next of kin.
The new deaths bring to 4,462 the number of American service members who have died in Iraq since the war began in 2003, according to an Associated Press count. And it brings to eight the number of U.S. troops killed in June so far.
Shiite Muslim militias have stepped up attacks on U.S. forces with the approach of the year-end withdrawal of all American troops.
The Associated Press contributed to this story