No group has claimed responsibility for Saturday's attack that targeted the Village restaurant often frequented by journalists and government officials and which has previously been attacked by the al-Shabab terrorist group.
Somali police officer Mahad Hussein said that the bombing occurred at about 9:45am local time (0645 GMT).
"There are fears of more casualties," the officer told DPA news agency, Al Jazeera reported.
The attack comes nearly two months after a hotel was bombed in Mogadishu killing at least 15 people.
The hotel attack was claimed by al-Shabab.