Shooting broke out as police raided a house in the early hours of Sunday morning in the Majengo suburbs of Mombasa, Kenya’s main port, after a tip-off from a suspect arrested on Saturday.
“We killed one suspect in the house and the one we were holding when he tried to run away,” deputy regional police chief John Gachomo told reporters, adding that officers were hunting several other suspects who had fled the scene.
Suspected Kenyan supporters of Somalia’s Al-Qaeda linked Shabaab insurgents have carried out a string of attacks in opposition to Nairobi’s sending troops into Somalia last year to fight the extremists.
Police also seized a pistol, three grenades and ammunition from the house.
The violence was the latest in a string of clashes and police raids on Kenya’s coast, where Islamists and a separatist movement have increasingly battled with security forces.
It has raised fears that political unrest could mar elections which are due to take place in March, five years after deadly post-poll killings shattered Kenya’s image as a beacon of regional stability.
Tourism on the Kenyan coast, a major pillar of the area’s economy, has been badly dented, with visitors scared off first by a spate of kidnappings of foreigners in 2011 and then by violence attributed to Islamists.