Injured have been evacuated to hospitals as attackers "are holding up in the hotel."
Rescue operations are underway at the 14 Riverside Drive in Westlands, Nairobi after armed attackers forced their way into a hotel and office complex.
The injured have been evacuated to several hospitals - Kenyatta, Aga Khan, MP Shah and Avenue. The hospitals have issued urgent appeals for blood donations.
Kenya's Inspector General of Police Joseph Boinett, at a press briefing on Tuesday afternoon, urged for calm as security agencies continue with rescue operations.
"We urge the public to remain calm and operate with the instructions of the security agencies because we are looking forward to bringing the situation to normalcy in the shortest time possible," Mr Boinett said.
Security officers are now in the building and people are being screened and evacuated, he said but did not give a figure of the injured.
The IGP said the attack started at about 3:00 o'clock when a group of unknown assailants attacked Dusit complex in what he said the police suspected could be a terror attack.
"Armed criminals are holding up in the hotel and specialist forces are currently flushing them out," he added.
Somalia-based Al Shabaab has already claimed responsibility for the attack.
The attack comes exactly three years after a Kenyan army base in Somalia was overran by the militants killing dozen soldiers.
Other recent attacks include Garissa University attack where at least 147 students died in April 2015 and the Westgate Mall attack in September 2013 in which at least 67 people were killed.