A car laden with explosives has rammed into a popular hotel in Somalia, reportedly killing three students whose school bus was crossing near the scene of the terror attack.

Witnesses said a huge blast was heard in the centre of the port city of Kismayu before the gunfire by the Al-Qaeda-affiliated Al-Shabaab militant group started.

A car was deliberately crashed into the gate of the Tawakal Hotel, which is frequented by politicians and business people.

Sahra Adbi, a local journalist, wrote on Twitter: “Three school kids died and close to a dozen wounded when their school bus crossing near Tawakal hotel was caught by the explosions.”

Multiple sources say students have been caught in the middle of the heavy fighting as they left school moments before the brutal attack unfolded.

The state-run Somali National Television said on Twitter that security forces were dealing with a “terrorist incident” at the Tawakal Hotel, for which al Qaeda-linked al Shabaab has claimed responsibility.

Abdiasis Abu Musab, al Shabaab’s military operation spokesperson, said the group targeted Jubbaland region’s administrators who work from the hotel.

Ironically, at the time of the attack, a meeting to discuss an anti-Al-Shabaab offensive was ongoing, Garowe Online reported.