At least 10 people, including two lawmakers, were killed in a car bomb and gun attack Wednesday on a top hotel in Somalia's capital Mogadishu claimed by the Al-Qaeda-linked Shabaab group, medical and security sources said.

Around 40 others were injured in the assault on the central Ambassador Hotel, where Somali security forces continued to battle Shabaab fighters into the evening, around five hours after the attack began.

The initial blast took place at around 5:40pm (1440 GMT).

"The attack was started with a heavy explosion and members from the Mujahedeen fighters stormed the building," the Shabaab said in a statement.

A security source told AFP that "a VBIED (vehicle-borne improvised explosive device) exploded" after which a firefight erupted inside the hotel complex.

Mohamed Elmi, a witness, said the blast "destroyed the whole area."

"I saw the dead bodies of seven people, most of them burned," he added.

Another witness, Ibrahim Sheikh Nur, said he saw "several dead bodies outside the hotel."

"The security forces are now inside and the whole area is cordoned off."

Shabaab fighters were chased out of Mogadishu in 2011 but the group remains a major threat in both Somalia and neighbouring Kenya, where it carries out frequent attacks.

The jihadists are fighting to overthrow Somalia's internationally-backed government.

On Wednesday, an official said the Shabaab commander who led a attack on Kenya's Garissa University in 2015 that left 148 people dead had been killed in a special forces raid in the south of the country.

Also on Wednesday, Pentagon spokesman Peter Cook said another senior Shabaab military commander was "presumed killed" following a US air strike on May 27.