The Mozambique government has called for international support after the most serious terror attack since the start of the Islamic State insurgency four years ago.

The remains of a dozen expats were discovered outside the Amarula Hotel in Mozambique as they attempted to flee jihadist militants who surrounded it as part of the attack.

The bodies of the contractors, who had been tied up and beheaded, were found under a tree outside the hotel in Palma, witnesses say.

The hotel has been subjected to multiple lootings since the attack and almost every room has been ransacked.

Palma, which was overrun by fighters a fortnight ago, has been reclaimed by the Mozambique army.

Residents have also returned to the area which is now swamped with military personnel.

Zvika Karadi, a contractor who was returning to check on his construction yard, said he was blown away by the destruction.

"I'm finished with Mozambique now. I will try to sell my company. I'm not staying. I've got family and I have to take care of them," he said

Violence has forced at least 11,000 people to flee Palma, with thousands more reported to be trapped inside the area.