The assailants may have taken some hostages inside the Liido Seafood restaurant, which is popular with Mogadishu's elite and government officials, Captain Mohammed Hussein said.
"The operation (to dislodge the attackers) is ongoing now. The (attackers) are still inside and fighting our troops," Hussein said from the scene of the attack as gunfire rang out in the background. He said he had counted at least three bodies outside the restaurant.
Witnesses said that gunmen entered the restaurant from the direction of the beach as clients, sitting behind razor wire, watched the seashore.
"They randomly fired at the people sitting near the beach before entering the restaurant," said witness Ahmed Nur, who was strolling along on the shoreline when the attack happened.
There was no immediate claim of responsibility for the violence, which bore the hallmarks of the Islamic extremist group al-Shabab, which has recently stepped up attacks.
Al-Shabab claimed responsibility for an attack last week on Kenyan peacekeepers in southwestern Somalia.
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