Blast, gunfire reported at upscale hotel complex in Kenya's capital Nairobi

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Hiram Macharia, a marketing executive at LG Electronics, said he and some colleagues had been rescued by police from their office two hours after the attack began, but one workmate did not survive.

"I knew one of them because he had a big scar on one of his hands", he said.

A mortuary official told AFP 11 Kenyans and one Briton were known to have died.

The Interior Ministry has said that the "mopping-up process" continues but in a tweet on Wednesday morning said all buildings and the area surrounding the DusitD2 hotel complex were secure, despite renewed gunfire and explosions.

Meanwhile, the vast upscale Village Market shopping centre in northern Nairobi said on Twitter that it had closed temporarily as a "security precaution". An unexploded grenade lay in the lobby, he said. Some family members said they had been in touch with loved ones still hiding inside the complex, waiting to be rescued.

Al-Shabaab, the Al-Qaeda-linked Somali group that assaulted a Nairobi shopping mall in 2013, claimed responsibility for Tuesday's attack on the DusitD2 compound, which includes a 101-room hotel, spa, restaurant, and offices for local and global companies.

Somalia-based Al Shabaab terrorist group claimed responsibility for the attack, which came exactly three years after a Kenyan army base in Somalia was overran by the militants killing dozen soldiers.

"The Australian High Commission in Nairobi is making urgent inquiries of local authorities to determine whether any Australians were affected by the attack on the DusitD2 Hotel complex", the spokeswoman said.

"The security operation operation at Dusit complex is over and all the terrorists have been eliminated", said Kenyatta.

Kenya has often been targeted by al Shabaab, who killed dozens of people in a shopping centre in 2013 and almost 150 students at a university in 2015.

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People hiding and waiting to be evacuated.

"We are working with the Kenyan authorities to determine if there are any USA citizens affected", the official said, adding all American diplomats were safe.

"There's a grenade in the bathroom", one officer yelled as police rushed out from one building.

The photographer saw five bodies slumped over tables on a restaurant terrace in the complex, which was hit in an attack claimed by Al-Shabaab terrorists. A British citizen was also reportedly killed in the attack.

At least two groups of people had still been trapped inside as dawn broke, and gunfire continued to ring out around the complex in Riverside Drive.

The attack began about 3pm local time. A reporter sent to the scene said the gunmen and security forces were exchanging gunfire.

Surveillance video showed the attack involved at least four armed men.

Police say at least 15 people were killed and a still undetermined number wounded.

Al-Hijra, the Somalia terror group's designated branch in Kenya that was added to Al-Shabaab's designation by the State Department last summer, repeated the claim of responsibility through their media outlet.

"One of the biggest fears you have in such a situation is whether the people who are banging at the door are the people who are going to get you out of such a situation, or whether they are the people who are going to hurt you".

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