A number of senior officials including a lawmaker, former army chief and the owner of Hotel Sahafi are feared to have been killed in hotel attack which started at 5am.
Sources have told Goobjoog News several senior government officials were in the hotel at the time of the attack as reports emerge of a possible hostage crisis.
Militants are said to have taken over the hotel and a possible hostage situation is fast developing.
Goobjoog News correspondent from Medina hospital in the city said 13 people had been injured including a Reuters photojournalist.
The special forces from National Intelligence Service Agency, NISA have been making headways into the scene of the incident and reports indicate a number of people have been rescued safely from the building.
A public service vehicle plying the route was destroyed completely and all passengers killed, more reports say.
Al-shabaab earlier claimed responsibility of the attack.