Al Qaeda-linked al Shabaab claimed responsibility for the blast, saying it was targeting "pro-US forces" and that it had killed a number of government soldiers.
"The suicide car bomb killed four civilians and injured several others," Mohamed Yusuf, the spokesman for the security ministry, was quoted as saying on state-run radio.
"The intelligence forces got the information in advance and they were about to capture the car bomb. However, as they pursued, the suicide car bomb hit a civilian car."
Residents said shooting followed the blast and they could see smoke and dust rising into the air after the explosion.
Al Shabaab is seeking to topple the Western-backed Mogadishu government and impose its own strict version of Islamic law in the country.
Sunday's attack showed the group was still capable of carrying out raids in the capital even as it is losing territory in rural areas to AU peace keepers who launched two major offensives in 2014.
"We were behind the attack. We targeted the forces that work for the U.S. and we killed a number of them," Sheikh Abdiasis Abu Musab, al Shabaab's military operations spokesman told Reuters.
In the past, al Shabaab has exaggerated the number of soldiers it has killed, while officials have played down losses.
