Ouagadougou (AFP) - Gunshots and explosions were heard coming from one of Ouagadougou's main hotels and a nearby restaurant on Friday night, with a witness saying several people had been killed in what the French embassy called a terrorist attack.

Around 10 vehicles were on fire in the street where the four-star Splendid hotel and the Cappuccino restaurant opposite -- both popular with United Nations staff and westerners -- are located in a busy, central area of Burkina Faso's capital not far from the international airport.

The attack comes less than two months after a jihadist hostage siege at the luxury Radisson Blu Hotel in the Malian capital Bamako in November, in which 20 people died including 14 foreigners.

A Cappuccino staff member, reached by telephone by AFP, said several people had been killed at the restaurant, without being able to give an exact toll.

Witnesses said attackers were still holed up in the 147-room hotel, while sporadic exchanges of fire could be heard between the assailants and security forces.

Three men clad in turbans at one point fired at the scene on Avenue Kwame Nkrumah, one of Ouagadougou's main thoroughfares.

A witness also reported seeing four assailants who were of Arab or white appearance and "wearing turbans."

The Burkinabe army meanwhile revealed that an armed group had carried out an attack earlier in the day near the border with Mali, killing two people.

"In the afternoon around 2:00 pm (1400 GMT), around 20 heavily-armed unidentified individuals carried out an attack against gendarmes in the village of Tin Abao," the army said in a statement, adding that an officer and a civilian had been killed and two more gendarmes wounded.

Last month, Burkina Faso swore in Roch Marc Christian Kabore as president, completing the troubled West African state's transition after the overthrow of its longtime ruler, Blaise Compaore in 2014 and a failed coup attempt in September.

Hundreds of thousands of people took to the streets in October 2014, when Compaore sought to extend his rule, forcing him to step down after ruling the poor, landlocked country with an iron fist for 27 years.

Kabore, 58, becomes only the third civilian president of the nine who have held power since the country's independence from France in 1960.