Two more blasts were heard, one when an attacker detonated a suicide vest.
Speaking to The Associated Press by telephone from the scene, Capt Mohamed Hussein said more than 20 people, including government officials, were thought to be trapped as security forces battled extremists holed up on the top floor of the Nasa-Hablod hotel, close to the presidential palace.
Two of the five attackers were killed on the first floor, Hussein said. The others hurled grenades and cut off the building's electricity as night fell.
Al-Shabab, Africa's deadliest Islamic extremist group, quickly claimed responsibility for Saturday's attack and said its fighters were inside the hotel. As night fell, sporadic gunfire could be heard as soldiers responded.
A senior Somali police colonel and a former lawmaker were among the dead, Hussein said.
Mohamed Dek Haji said he survived the bombing as he walked beside a parked car that was largely destroyed by the explosion. He said he saw at least three armed men in military uniforms running toward the hotel after the suicide bombing at its gate.
Witnesses in some previous attacks have said al-Shabab fighters disguised themselves by wearing military uniforms.
Al-Shabab often targets high-profile areas of Mogadishu. It has not commented on the massive attack two weeks ago; experts have said the death toll was so high that the group hesitated to further anger Somali citizens as its pursues its insurgency.
Since the blast two weeks ago, President Mohamed Abdullahi Mohamed has visited regional countries to seek more support for the fight against the extremist group, vowing a "state of war."
A 22,000-strong multinational African Union force in Somalia is expected to withdraw its forces and hand over the country's security to the Somali military by the end of 2020.
US military officials and others in recent months have expressed concern that Somali forces are not yet ready.
The US military also has stepped up military efforts against al-Shabab this year in Somalia, carrying out nearly 20 drone strikes, as the global war on extremism moves deeper into the African continent.
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