At least 10 people have been injured after a grenade was hurled into a bar in Diani, Kwale County on Thursday morning.
"There was an explosion at the bar and about 10 people were injured," said Mr Jack Ekakuro, the local police chief in Diani, south of Mombasa.
Attackers targeted the Tandoori bar in Diani in the early hours of Thursday, when it was still crowded with people celebrating the New Year holiday.
"We're trying to establish the kind of explosive used," Mr Ekakuro added, but a police officer at the scene, speaking on condition of anonymity, said the blast "had all the characteristics" of a grenade.
"The attackers were on a motorcycle and fled after hurling the grenade," a police source said. There was no immediate claim of responsibility for the attack.
Since Kenyan troops invaded southern Somalia in October 2011 to help oust al-Shabaab insurgents, it has been hit by a series of attacks.
Homegrown groups including the Islamist Al-Hijra group, a radical organisation formerly known as the Muslim Youth Center, operate at the Kenyan coast and have been linked to the al-Shabaab.
Grenades have been hurled into restaurants in Mombasa and crowded areas in the capital Nairobi, as well as a string of attacks in the remote northeast region bordering Somalia.