At least 12 people have been killed in Somalia's capital Mogadishu after Al-Qaeda-linked militants attacked a hotel, seizing control in a siege that authorities are still battling to end, an intelligence officer told Reuters on Saturday.

The attackers blasted their way into the Hayat Hotel on Friday evening with two car bombs before opening fire. Somalia's Al-Shabaab insurgents have claimed responsibility.

"So far we have confirmed 12 people, mostly civilians, died," Mohammed, an intelligence officer who only gave one name, told Reuters. "The operation is about to be concluded but it is still going on." 

The detonations sent huge plumes of smoke over the busy junction on Friday night, and the sound of gunfire still crackled across the capital by 0700 GMT on Saturday.

Sounds of explosions punctuated the night as government forces tried to wrest control of the hotel back from the militants, witnesses said.

Large sections of the hotel were destroyed by the fighting, they said.

Friday's attack was the first major attack since President Hassan Sheikh Mohamud took office in May.

The al Qaeda-linked Al-Shabaab group claimed responsibility for the attack, according to a translation by the SITE Intelligence Group, which monitors jihadist group statements.

Al-Shabaab has been fighting to topple the Somali government for more than 10 years. It wants to establish its own rule based on a strict interpretation of Islamic law.

The Hayat Hotel is a popular venue with lawmakers and other government officials. There was no immediate information on whether any of them had been caught up in the siege. By New Arab Staff & Agencies, New Arab