Al-Shabaab insurgents boasted a suicide bomber from their group was responsible for the killings, the latest in a long line of attacks the Al-Qaeda linked group has carried out.

"Our teams have collected five dead bodies and 25 wounded people," Abdukadir Abdirahman, director of the Aamin Ambulance service, told AFP, warning that the tally could rise.

"The teams are still working," Abdirahman said.

Mogadishu is regularly targeted by the Shabaab fighters in their long fight to topple the government.

They said their fighters were trying to kill senior officials staying in the famous Maka Al-Mukarama hotel.

"There was a suicide blast followed by gunfire, in which the mujahedeen fighters targeted the commanders and officials of the Somali government who stayed at the hotel," the group claimed in a statement on a pro-Shabaab website.

There was also heavy gunfire after the blast.

"There was a huge car bomb blast along the Maka Al-Mukarama road," said police officer Mohamed Farah. "It destroyed many businesses and vehicles."

Witnesses described how the blast ripped through one of the busiest streets in the seaside capital.

At the time of the attack in the early evening, the street was filled with people relaxing after a day at work.

"The whole area was in flames, and I could see the ambulances rushing to the scene," said Abdisamed Mohamed, a witness. "There was gunfire too, but we don’t know who was shooting."

A second blast was heard in the area a few minutes later, but it was unclear what caused that explosion.

Shabaab fighters fled their fixed positions they once held in Mogadishu in 2011, and have since lost many of their strongholds.

But they retain control of large rural swathes of the country, and continue to wage a guerrilla war against the authorities.