A suicide bomber killed at least 16 people on Saturday in an attack on a cafe in a Somali town close to the Ethiopian border frequented by local and foreign soldiers fighting al Qaeda-linked rebels.

Al Shabaab said it had carried out the bombing, in the town of Baladweyne, targeting troops participating in an African Union peacekeeping force fighting the Somali Islamist group.

"A man with an explosives jacket entered unexpectedly in the tea shop where soldiers and civilians sat ... and blew himself up," said local elder Ahmed Nur, speaking from the scene of the blast.

At least 16 people were killed and 33 wounded, local politician Dahir Amin Jesow told Reuters by telephone from Baladweyne. "The death toll may rise."

Somali and African forces pushed Al Shabaab out of Baladweyne, about 210 miles north of Mogadishu, more than a year ago.

But while the territory that al Shabaab controls has greatly dwindled over the past two years, it continues to control large rural areas and some towns and has ratcheted up guerrilla-style attacks.

"Our main target was Ethiopian and Djibouti troops who invaded our country," said Al Shabaab spokesman Sheikh Abdiasis Abu Musab. He put the death toll at 25.

There was no independent word on whether foreign soldiers were among the casualties.

Horn of Africa analyst Rashid Abdi said: "Al Shabaab is sending a message that it has the will and the capacity to carry out these kinds of attacks. They are also sending a message that they have huge geographic reach."

Destabilising key town

Al Shabaab demonstrated the capacity to strike at far-away targets last month when its gunmen raided a shopping mall in Nairobi, hurling grenades and spraying bullets at shoppers as punishment for Kenya sending troops to Somalia.

Uganda on Friday heightened its "terror" alert to maximum for the first time since bombings in 2010 that killed 79 people, citing domestic and US intelligence indications of a possibly imminent attack by al Shabaab.

Abdirahman Omar Osman, spokesman for President Hassan Sheikh Mohamud, said of Saturday's bombing: "That suicide attack was deliberately aimed at destabilize the city and this is something we will not tolerate and it will not stop our plan to establish a local government in the region."

Straddling a major highway that links south-western Somalia to southern and northern parts of the country, Baladweyne is the main gateway to the Ogaden region in Ethiopia and a strategically vital area that Addis Ababa has often controlled.

Analyst Abdi said Baladweyne is now probably more secure than it was a year ago despite grenade attacks and targeted killings.

"In a way this attack is also a message of weakness as al Shabaab are not able to carry out a conventional assault on the town in the way they use to two years ago," he said.