The BBC's Moalimu Mohammed in
Mogadishu says 11 people have been
confirmed dead in
the explosion and
others have been seriously injured.
Banooda restaurant is in front of the
Central Hotel, which is often frequented
by politicians.
Militants from the al-Shabab Islamist
group often attack hotels, restaurants and
government complexes in the city.
"A vehicle loaded with explosives was
parked outside the restaurant," police
officer Ahmed Warhere told the AFP news
agency.
Our reporter says ambulances rushed to
the scene, where there is blood and
wreckage everywhere, to help the injured.
At least 20 people, including senior
officials, were killed in an al-Shabab
attack on the Central Hotel in February.
The al-Qaeda-linked insurgents oppose
the UN-backed administration and want
African Union forces to leave Somalia.
On Monday, al-Shabab said it was behind
the bombing of a UN vehicle in Garowe,
the main city in the north-eastern
Puntland region, that killed seven people.
Al-Shabab has been pushed out of the
main towns it once controlled but still
controls rural areas of the south.
Earlier this month, Somalia placed a
bounty on the top 11 leaders of the group.