"Several people have been killed, there are at least seven, including four civilians and three policemen," police officer Mohammed Duale told AFP at the scene.
The bomb went off near the busy KM4 junction in central Mogadishu, close to the Turkish embassy. Another security source at the scene said the bomb appeared to have been planted at the side of the road.
The attack is the latest in a string of bombings in the city attributed to Al-Qaeda-linked Shebab rebels, who are battling to overthrow the war-torn country's internationally-backed but fragile government.