Visual tracking of multiple targets is a challenging problem, especially when efficiency is an issue. Occlusions, if not properly handled, are a major source of failure. Solutions supporting principled occlusion reasoning have been proposed but are yet unpractical for online applications. This paper presents a new solution which effectively manages the trade-off between reliable modeling and computational efficiency. The Hybrid Joint-Separable (HJS) filter is derived from a joint Bayesian formulation of the problem, and shown to be efficient while optimal in terms of compact belief representation. Computational efficiency is achieved by employing a Markov random field approximation to joint dynamics and an incremental algorithm for posterior update with an appearance likelihood that implements a physically-based model of the occlusion process. A particle filter implementation is proposed which achieves accurate tracking during partial occlusions, while in cases of complete occlusion, tracking hypotheses are bound to estimated occlusion volumes. Experiments show that the proposed algorithm is efficient, robust, and able to resolve long-term occlusions between targets with identical appearance.