The attack happened last night when a blast detonated in a busy restaurant frequented by international soldiers. The port city of Djibouti is used as a base by several militaries including the US, which has its only African permanent base there.
Spanish officials earlier said this was a grenade attack.
German officials said there was a blast but did not say what caused it. Djibouti's Interior Ministry said "early indications of the investigations show that the attackers were two suicide bombers of Somali origin; a man and a veiled woman."
The British government today said yesterday's explosion had resulted "in a number of fatalities and multiple serious casualties including western nationals." Britain recommended "extreme caution and vigilance" if travelling to Djibouti.
Djibouti contributes troops to the African Union military force fighting militants in Somalia. Al-Shabab fighters have previously carried out attacks in Uganda and Kenya, which also contribute troops. Ethiopian officials believe Somali militants also tried and failed to carry out an attack in Addis Ababa, the capital.
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