Colonel Salah Osman, a police officer who was part of the rescue operation on Friday night, told CNN that the attack began when a auto bomb exploded in a suicide blast at the gate of the Asasey, a heavily fortified hotel 500 km south of the capital Mogadishu.
Three Kenyans, three Tanzanians, two Americans and a Briton also were among the dead, said Ahmed Madobe, the president of Jubbaland regional state which controls Kismayo.
A auto bomb exploded at the hotel in the southern port city while local elders and lawmakers were meeting on Friday night, before three gunmen stormed in, police said.
Omar Suleiman, a US-based imam who knew journalist Ms Nalayeh, paid tribute to her on social media.
The victims included several foreigners and a prominent Somali-Canadian journalist, Nodan Halayeh, who perished along with her husband.
The jihadist group and government officials tend to give differing casualty figures for attacks.
"First, we targeted [the hotel] with a suicide auto bomb and then armed mujahideen [fighters] stormed the hotel", said al-Shabaab's military operations spokesperson Abdiasis Abu Musab. What a loss to us.
The Islamist militant crew al-Shabaab, which is linked to al-Qaeda and is attempting to plunge Somalia's central authorities, mentioned it had conducted a suicide attack.
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The Friday night attack started with a suicide auto bomb blast, followed by gunmen storming into the Asasey Hotel.
Some of Nalayeh's previous social media posts depicting people smiling and going about their lives re-circulated on Twitter as news of her death spread online - images, people noted in their posts, that were at odds with the depiction of Somalia as a place devastated by decades of civil war, starvation and conflict.
Canadian-Somalian journalist Hodan Nalaye was killed in the hotel attack.
The siege lasted for nearly 12 hours and only ended on Saturday morning after clashes with security forces.
A auto destroyed during the attack at Asasey Hotel in Kismayo, which left 26 dead. But the mom of two had now returned to Somalia.
"We have confirmed the death of seven people including a former local administration minister and a lawmaker", said Abdi Dhuhul, a security official. But the group has not hit Kismayo, in the semi-autonomous Jubaland region, since 2012, according to the BBC.
It remains a major security threat, with fighters frequently carrying out bombings in Somalia and neighbouring Kenya, whose troops form part of the African Union-mandated peacekeeping force that helps defend the Somali government.