Captain Mohamed Hussein says gunfire could be heard inside the Nasa-Hablod hotel.
Today's blast in Somalia's capital comes two weeks after more than 350 people were killed in a massive truck bombing on a busy Mogadishu street in the country's worst-ever attack.
The extremist group al-Shabab often targets high-profile areas of Mogadishu. There was no immediate claim of responsibility Saturday.
Since the blast two weeks ago, President Mohamed Abdullahi Mohamed has been visiting regional countries to seek more support for the fight against the extremist group.
The US military also has stepped up military efforts against al-Shabab this year in Somalia, carrying out nearly 20 drone strikes.