General Ali Hussein, a Somali police commander, said: "There were two suicide cars full of explosives."
Ali Jama, information minister, said: "The government condemns this act of terrorism, but we are currently interrogating two people whom we suspect were involved and might shed more light on the incident.
"We do not want to jump to conclusions, but all indications are that the attack was carried out by the Islamists in Mogadishu because they are the ones who have invited foreigners with this kind of expertise."
Mukhtar Hassan, who lives near the checkpoint, said: "The suiciders were only using one car, the other two cars were victims of the blast.
"I was near the checkpoint and before we knew what was going there was some kind of fire and then a huge blast from a Toyota Mark II."
Security has been tight at the checkpoint since an assassination attempt on Abdullahi Yusuf Ahmed, Somalia's president, last September.
The government blamed the September 18 incident on the Islamic Courts, which denied responsibility.
"The attack was the work of Islamic suicide bombers and 40 people had been killed"
Mohamed Ibrahim Said Bilal, commander for the Union of Islamic Courts in Bay region
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The courts have since declared war on Ethiopian soldiers protecting the government.
Hussein, the police commander, said the car had been driven to Baidoa from Mogadishu.
Mohamed Ibrahim Said Bilal, a commander for the Islamic Courts in Bay region, said the attack was the work of "Islamic suicide bombers" and claimed that 40 people had been killed.
The attack came hours after the Ethiopian parliament adopted a resolution that called the courts a "clear and present danger".
They authorised the government to take "any legal action against any invasion coming to our country".
The vote followed an earlier attack on an Ethiopian military convoy outside Baidoa and a day after the Islamic Courts accused Ethiopia of shelling a town they hold near the border.