Security officers have been deployed to Westlands in Nairobi after gunshots heard in the area around Dusit Hotel.
Police say a team from the General Service Unit has been dispatched.
WHAT WE KNOW SO FAR
Smoke could be seen from something burning outside the affected building.
Some of the people in the nearby buildings told the Nation that they are holed up in their offices.
Police have warned people to stay away from the area near Dusit Hotel as they respond to the gunshot and explosion reports.
Surrounding buildings have been evacuated under the watchful eye of armed plain-clothed and uniformed officers.
Heavy gunfire can still be heard coming the DusitD2 Hotel.
A Kenya Air Force helicopter is hovering over the building as security officers evacuate people from the hotel.
The gunshots and explosion were reported at around 3:15pm. Witnesses said they heard a loud bang, then gunshots rent the air.
Incident happened on 14 Riverside, the compound that houses DusitD2 Hotel and the Commission on Revenue Allocation.
"Police wish to confirm that there has been an attack incident along 14 Riverside Drive. The area has since been cordoned off and motorists are advised to use alternative routes to facilitate smooth operations of the Police," the National Police Service Commission said in a tweet.