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A Somali soldier uses his mobile phone to record the wreckage of vehicles at the scene of an explosion near the presidential palace in Somalia's capital Mogadishu March 18, 2013.Omar Faruk/Reuters

A suicide car bomber killed at least 10 people on Monday in the worst attack in the Somali capital this year when he tried to kill Mogadishu's security chief near the presidential palace, police and rebels said.

Al-Qaeda-linked Islamist militant group al Shabaab said it carried out the attack along Maka al Mukarram road that runs between the palace and the national theatre, a route lined by tearooms that were engulfed in fire from the blast.

A public minibus driving along the road burst into flames, when the suicide bomber set off explosives packed into his car in an attempt to kill Khalif Ahmed Ilig, the Mogadishu security chief, police and the rebels said.

Ambulance sirens wailed through the city's congested streets and a Reuters witness at the scene saw pools of blood on the ground. Residents joined in the rescue operations, pulling victims from the tea-houses and the minibus.

Police said seven civilians, three government security officers, and the bomber died in the blast that brought part of the city to a standstill. At least seven others were injured.

"The suicide car bomber targeted a senior national security officer whose car was passing near the theatre," senior police officer Abdiqadir Mohamud told Reuters, adding that the official had been injured.

"Most of the people who died were on board the minibus - civilians. This public vehicle coincidentally came between the government car and the car bomb when it was hit. Littered at the scene are human hands and flesh."

The explosion could be heard several kilometres away in Mogadishu's central business district.

Somali President Hassan Sheikh Mohamud, elected last year in the country's first national vote since dictator Siad Barre's overthrow in 1991, was in another part of the city during the blast, police said. The presidential palace stands about 100 metres from where the explosion struck.

Civil war followed the fall of Barre, which left Somalia without effective central government and awash with weapons, ushering in two decades of turmoil.

Security in Mogadishu has improved greatly since a military offensive drove Islamist rebels allied to al Qaeda out of the city in August 2011. But bombings and assassinations in Mogadishu, blamed on militants, still occur often.

The attack on Monday was the worst so far this year, police said, a stark reminder of two decades of civil strife, in a war-torn country where the central government depends heavily on a 17,600-strong African Union peacekeeping force for its survival.

"A wall, a tea-shop and two small shops collapsed from the blast. I could see injured people being pulled from under these places. There are pieces of human flesh and blood on the scene," resident Farah Abdulle told Reuters.

"This is Maka Al Mukaram road, the riskiest and busiest street in Mogadishu."

Al Shabaab spokesman Sheikh Ali Mohamud Rage said the group was behind the attack. The group, which wants to impose its strict version of Islamic law, or Sharia, said the strike was in revenge for the killing of people believed to be its members over the past few weeks.

"A car bomb by a mujahid targeted Khalif, the Mogadishu national security chief. He is seriously injured," Rage, told Reuters. "Many of his body guards and other security officials died and many others were wounded. It was revenge."

On Sunday, al Shabaab fighters regained control of Hudur, the capital of Bakool province near the Ethiopian border, after Ethiopian troops who have been part of an African offensive against the militants withdrew from the dusty town. It was not immediately clear why the Ethiopian troops pulled out.

In September, al Shabaab withdrew from the southern Indian Ocean port of Kismayu under pressure from African union troops, their last major urban bastion in the Horn of Africa state.

This signalled their demise as a quasi-conventional military force. However, they pledged to step up a campaign of suicide bombings and hit-and-run attacks.

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