Security forces have secured the area around the Banoda restaurant in Mogadishu, said senior police officer Mohamed Abdi. The car with the bomb was parked near Somalia's presidential palace, he said.
No group has yet claimed of responsibility for the attack, but it bears the hallmarks of Somalia's Islamic extremist group al-Shabab, which frequently carries out attacks in Mogadishu and throughout Somalia.
At least seven people were killed Monday when a bomb planted in a UN van exploded in the northern area of Puntland, a semiautonomous region that is normally peaceful.
Al-Shabab, which is allied to al-Qaida, appears to be stepping up attacks in Somalia and across borders even as it loses ground inside Somalia.
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Despite losing some of its top leaders in U.S. Air strikes and being pushed by African Union forces out of the capital, Mogadishu, and into rural regions mostly in southern Somalia, al-Shabab is still able to carry out deadly bombings against government targets and public places seen as popular with foreigners.
The extremists have also attacked neighbouring Kenya, which has sent troops to Somalia to fight the insurgents.