Al Shabaab said it attached an upscale hotel in the southern port city of Kismayo on Friday afternoon.
Local residents said the attack began with a car bomb detonated at the entrance gate of the hotel followed by gunfire.
Political leaders, MPs, elders and presidential candidates were at the hotel at the time of the complex attack.
The attack comes as Jubbaland is preparing to hold presidential and parliamentary elections next month.
Several people are feared dead and security forces are fighting with the attackers to end the seige.