Three people were confirmed dead in the 14 Riverside Drive attack in Westlands on Tuesday.
Police have quelled the fire and people are being evacuated.
The attack comes on the third anniversary of the El Adde which took place on January 15, 2016.
At 14 Riverside drive, gunshots could be heard from all quarters on Tuesday afternoon.
“Its in the same compound with Dusit D2 and commission for revenue allocation. For the past 15 minutes. Started with an explosion. We are lying on the floor in our offices can’t look out,” one of the workers said.
There is an on-going police operation along that road and motorists are encouraged to avoid the area.
One of the people in the area only named Ronald said they were under attack from unknown people.
“Kumekuwa na bomb blast.. we are not safe..if I die please tell my children that I love them.. call the Israel Embassy and recce squad,” he told the Star amid whisper.
Shuttered window panes at 14 Riverside drive, Westlands. Patrick Vidija
Three vehicles could be seen burning in the area.
National Police Spokesperson Charles Owino said they have sent to the scene and cordoned off the area.
“We were informed of the shooting incident around Dusit Hotel. We have dispatched officers from the Terror Unit and the DCI to the scene. We should be able to know what is happening there in the next few minutes
Officers at the scene said the attackers came with a vehicle wearing a bulletproof vest ready to attack.
“Several hostages have been held in Dusit hotel and we are waiting for back up,” the officer told the Star.
Students from the University of Nairobi have been evacuated at the Chiromo building as the operation continues.