AFP news agency reported smoke rising from the hotel, which is located in Aden’s western suburbs.
Officials did not say whether the dead or injured included members of government.
Troops loyal to exiled President Abedrabbo Mansour Hadi, backed by a Saudi-led bombing campaign and troops and military hardware provided by Gulf countries, retook several southern provinces from Huthi rebels earlier this year.
About three rockets hit the headquarters of Yemen’s prime minister and his cabinet in the southern port city of Aden on Tuesday morning, causing massive explosions that rocked the whole city, local sources told Xinhua.
“The situation on the ground shows that they are waging a losing battle and that their role has been diminished to retreating on the ground and to try to inflict damage with mines, ambushes and rockets”, he said in another message. The building was on fire and there were ambulances on the scene, they said.
It is unclear if any senior government officials were hurt in the attack.
The Qasr hotel has been used a seat of government since a Saudi-led coalition forced Houthi rebels from Aden, Yemen’s second city.
Saudi Arabia and its coalition partners launched airstrikes on Houthi positions across Yemen in March, hoping to wipe out the Iranian-allied rebel group that overthrew the government and seized power.