“One person has been wounded… a person left luggage containing an improvised explosive device in a shop,” Nairobi police chief Benson Kibue said.
“We are appealing to residents to help us get him.”
There was no immediate claim of responsibility for the attack.
However, since Kenyan troops invaded southern Somalia in October 2011 to help oust the neighbouring country’s Al-Qaeda-linked Shabaab insurgents, it has been hit by a series of attacks.
Homegrown groups including the Islamist Al-Hijra group, a radical organisation formerly known as the Muslim Youth Center, operate in Kenya and have been linked to the Shabaab.
Grenades have been hurled into restaurants in crowded areas in Nairobi as well as on the popular tourist Indian Ocean coast, and there has been a string of attacks in the remote northeast region bordering Somalia.
Ten people were wounded Thursday when attackers hurled a grenade into a bar in a popular coastal tourist resort town of Diani.
The Shabaab claimed the brutal September assault on Nairobi’s upmarket Westgate mall in which at least 67 people died in a four-day siege of the shopping centre popular with foreigners.
The Shabaab on Wednesday evening set off twin bombs at a hotel in the Somali capital, killing 11. It claimed the attack was the start of its campaign for the New Year.