An attack on a Mogadishu hotel by jihadist gunmen has ended with at least 10 dead, Somalia's security minister said Thursday.

Somali security forces had been battling the Shabaab fighters holed up inside the building since Wednesday evening when the assault began with a car bomb that tore the front off the six-storey Ambassador Hotel.

"All the gunmen were killed by the security forces," said security minister Abdirizak Omar Mohamed.

"More than 10 people are so far confirmed dead and many others are wounded," he told reporters, adding that rescuers were searching the damaged building for survivors and dead bodies.

The bodies of three suspected attackers were displayed in the dirt outside the hotel.

The African Union Mission in Somalia (AMISOM) which protects the government and fights the Shabaab said two parliamentarians were among the dead.

The attack began on Wednesday evening with a large car bomb followed by Shabaab fighters storming the upmarket hotel, popular with government officials and wealthy Somalis.

Medical and security sources said around 40 people were also injured in the attack that left burning cars and debris scattered across the capital's main Maka al-Mukarama street.

Gunfire continued throughout the night and could still be heard by dawn on Thursday, more than 13 hours after the attack began.

The Shabaab, an Al-Qaeda aligned extremist group, was forced out of the capital in 2011 but continues its battle to overthrow the internationally-backed government and launches regular attacks on military, government and civilian targets in Mogadishu and elsewhere.

The group claimed responsibility for Wednesday's attack soon after it began.

Also on Wednesday, Somali special forces claimed to have killed Mohamed Mohamud Ali also known as Dulyadin and Kuno, the suspected organiser of an attack on a university in Garissa, Kenya, in April 2015 that killed 148 people, mostly students.

The US also said it had killed a senior Shabaab planner, Abdullahi Haji Da'ud, in a drone strike.

Source: AFP