Witnesses said they could hear explosions within the vast Westgate Shopping Centre in Nairobi and there were reports of gunfire in the streets outside.
Kenyan troops have moved in to end the siege but spokesman for terror group Al Shabaab Ali Mohamud Rage said in a statement posted on an Islamist website that those held inside will ‘bear the brunt of any force’ used by soldiers against the militants.
The statement read: ‘We authorise the mujahedeen inside the building to take actions against the prisoners as much as they are pressed.
‘We are telling Christians advancing onto the mujahedeen to have mercy for their prisoners who will bear the brunt of any force directed against the mujahedeen.’
The Al-Qaeda linked group claimed to be in contact with the fighters inside the mall and said the gunmen were battling both Kenyan and Israeli forces.
This was followed by three big explosions, AFP correspondents at the scene said.
The Shebab have not said how many people were being held by the dozen-or-so attackers, who marched into the sprawling four-storey complex at midday Saturday, spraying shoppers with machine gunfire and tossing grenades.
Terrorists stormed the Israeli-owned shopping centre on Saturday afternoon.
At least 69 people have been killed so far – including three Britons – and 175 people have been left injured.
Those caught up in the atrocity come from 13 different countries including the U.S., France, Ghana, New Zealand and Holland.