Prime Minister Ali Mohamed Gedi, on his first visit to the lawless city in the Horn of Africa country since taking office last year, was unhurt by the explosion in a stadium.

He appeared to want to continue speaking but was immediately whisked away from the site by his security team, according to an AFP correspondent on the scene.

Several thousand Somalis who were attending the speech fled the stadium in panic as the dead and wounded, several of whom suffered serious injuries, were taken to local hospitals, police and witnesses said.

"At least eight of (the 28 wounded) are in very critical condition," said Abdi Hassan, a senior Mogadishu police official, adding that the explosion was believed to have been caused by a hand grenade.

The explosion occurred as Gedi continued his maiden tour of the capital that began on Friday in a bid to overcome a bitter dispute over when and where his transitional government should relocate to inside Somalia from exile in Kenya.