Explosion and gunshots suspected to be acts of terrorism were this afternoon heard in Kenya's capital city, Nairobi along the Riverside Drive.

The incident happened at around 3:15 pm from Dusit Hotel in Riverside, police said.

Local media reports indicate that the building is being evacuated as security organs and rescue workers embark on the response.

According to Kenya Police, the attackers at 14 Riverside Drive forced their way in by shooting at guards; they hurled explosives into vehicles and went into DusitD2 Hotel.

Joseph Kipchirchir Boinet, the Inspector-General of Police, said that the situation is being "managed”. He called for calm.

However, he couldn’t confirm if any people have lost their lives in the attack and the extent of injuries sustained by the victims.

"We are aware that armed criminals are holding up in the hotel and specialist forces are now currently flushing them out" IG Boinet has said.  

Several vehicles were seen burning as people were being carried away from the scene.

Somali based militant group, al-Shabab claimed the attack.

A Kenya Air Force helicopter was hovering over the building as security officers evacuated people from Dusit Hotel.

The attack came three years to the day after al-Shabab extremists attacked a Kenyan military base in Somalia, killing scores of people.

The al-Qaida-linked al-Shabab has in the recent past launched terror attacks that have claimed several lives in Kenya, in protest to the presence of Kenyan troops in Somalia.