
Gunmen rammed an explosives-laden vehicle into the building’s entrance in the Hiran region city of Beledweyne.
Several armed men then entered and “started shooting people inside”, security official Ahmed Osman told AFP from the city.
“We don’t have more details about the casualties, but we have confirmed at least four people killed,” he said.
Traditional elders and military officials were meeting at the hotel to discuss efforts to support the Somali government’s fight against the rebel group.
Police officer Ali Mahad said many of those in attendance had been rescued.
“Security forces are tackling several gunmen who are cornered in one part of the building,” he said.
Elder Abdirahman Hassan said those killed included two traditional elders, another civilian and one member of the security forces.
“Their dead bodies were removed from the ground floor of the hotel,” he said.
Al-Shabaab claimed responsibility for the attack.
The Islamist group has been fighting the federal government for more than 15 years, carrying out numerous deadly attacks in the capital Mogadishu and other regions.
Although they were driven out of the capital by African Union forces in 2011, the group is still present in rural areas.
Somalia’s president has promised “total” war against Al-Shabaab.
The army has joined forces with local militias in a military campaign backed by an AU force and US air strikes.