A car bomb ripped through a government compound in Mogadishuon Tuesday, killing at least 57 in the deadliest attack by Somalia's Shebab since they launched their insurgency almost five years ago.

Witnesses described the carnage as the worst they had seen in Mogadishu since Somalia plunged into chaos two decades ago and said the devastation resembled scenes from World War II.

The suicide bomber rammed his explosives-laden vehicle into the compound housing four ministries at a strategic crossroads, two months after the Al Qaeda-linked rebels dismantled all their positions in the capital.

"The number of people killed is 57 and about 34 are unaccounted for," said a police official speaking on condition of anonymity. "We fear that the number of dead could rise."

An African Union official said up to 50 people were killed in the blast which happened at "Kilometre 4", a busy intersection four kilometres (2.5 miles) from the presidential palace.

Medics warned the death toll could be even higher.

Most of the casualties were reported to be civilians, with local residents saying the bomb went off as students were queueing for scholarships offered by Turkey.

"The scene looks like something from World War II. This was total devastation," said Abdullahi Aptidon, a resident at K4.

"It was a powerful explosion and at first I thought it was a landmine, but the magnitude of the explosion made me imagine something different. This is the worst tragedy since civil war began in 1991."

The Western-backed Transitional Federal Government issued a statement saying no senior officials were hurt and putting the toll at only 15 dead and more than 20 wounded.

According to witnesses, the bomber managed to sneak deep intoMogadishu under the cover of transporting displaced civilians from a nearby camp.

A Shebab official who did want to be named said one of their fighters carried out the attack.

"One of our Mujahidin made the sacrifice to kill TFG officials, the African Union troops and other informers who were in the compound," he said.

If the death toll is confirmed, Tuesday's attack is the deadliest carried out by the Shebab since multiple bombings in Kampala killed at least 76 people in July 2010.

It would also be their deadliest in Somalia since the group formed around five years ago, largely in response to Ethiopia's occupation.

In a surprise move, the Shebab abandoned their positions in Mogadishu in early August, after years of attempting and failing to break the AU's defences and take over the capital.

They had vowed however that it was a tactical move and that their struggle against the Western-backedSomali government would continue.

They pulled back to areas they already controlled in the south and west and observers had warned that the Shebab could be reverting to hit-and-run guerrilla tactics.

AU and pro-government forces had re-asserted their authority over most of the capital and the Shebab's withdrawal had led to a relative lull in violence.

The Shebab have suddenly rekindled their insurgency on several fronts almost simultaneously, with clashes also reported in western and southern regions.

They launched an attack late Monday in the city of Dhusamareb, which lies in western Somalia near the border with Ethiopia and is the main stronghold of Ahlu Sunna wal Jamaa, a Sufi militia allied to the government.

The UN refuge agency also reported violence in Dhobley, a town on Somalia's southern border with Kenya and said the clashes were "further exacerbating the already severe humanitarian situation."

"We have received initial, unconfirmed reports of deaths and scores of injured people," said Adrian Edwards, spokesman for the UN High Commissioner for Refugees, without specifying which armed groups were involved in the fighting.

Dhobley is under the control of forces from the self-declared state of Azania, an anti-Shebab militia reportedly backed by Kenya to create a buffer zone along the troubled frontier.

The UN Security Council last week urged the AU to increase its 9,000 troops propping up the Somali government. The force currently comprises soldiers from the only two countries to stump up troops for the force, Burundi and Uganda.

The Horn of African country has lacked a central authority since plunging into a deadly civil war with the 1991 ouster of president Mohamed Siad Barre.

Last month the Somali government, the Ahlu Sunna Wal Jamaa and authorities of two semi-autonomous regions launched a fresh bid to restore the war-torn country and install a national authority.