There was no immediate claim of responsibility for the attack in the run-down Eastleigh suburb, the second explosion there since Wednesday night. Local lawmaker Yusuf Hassan was among the injured, Nairobi's police chief Moses Ombati said.
One Eastleigh resident, Said Abdullahi, said he heard two gunshots followed by an explosion outside a mosque.
"Some of those injured were worshippers leaving the mosque," Abdullahi told Reuters.
Ombati said it was too early to tell whether a grenade or a bomb caused the explosion and it was possible the casualty toll would rise.
Kenyan authorities have blamed Somali militants and their sympathisers for a wave of grenade and gun attacks in Kenya after Nairobi sent soldiers into neighbouring Somalia last year to drive out Islamist rebel fighters with links to al Qaeda.
Kenya's government accuses al Shabaab rebels of making cross-border attacks and blamed the group for the kidnapping of Western tourists and aid workers.
Abdirashid Hashi, a Somalia analyst at the International Crisis Group, said lawmaker Hassan was an open critic of the al Shabaab rebel group's almost six-year campaign against Somalia's Western-backed government.
Tensions have risen in the past two months in Eastleigh, a part of Nairobi commonly dubbed "Little Mogadishu" because of its large Somali population.
"It's too early to say who was behind this ... but I don't think mosques are off-limits to al Shabaab," Hashi told Reuters.
It was not clear if Hassan, a former journalist at the BBC, was the target of the attack.
Mounting insecurity is a growing concern as the region's biggest economy prepares for a presidential election in March, the first poll since a contested 2007 vote which unleashed nationwide ethnic violence.
Unknown assailants on Wednesday detonated a makeshift bomb, apparently by remote control, wounding at least nine people in an attack that appeared to target Kenyan nationals.
In mid-November, a bomb ripped through a commuter minibus as it travelled through Eastleigh in a deadly strike that sparked a day of street battles between Kenyan nationals and ethnic Somalis.
The attacks in Kenya have intensified since Kenyan troops, fighting under the banner of an African Union peacekeeping force, launched an offensive in late September against al Shabaab's last major urban stronghold, the Somali port of Kismayu, forcing the rebels to flee.
from REUTERS
By Richard Lough
NAIROBI | Fri Dec 7, 2012 9:50pm GMT
(Additional reporting by Humphrey Malalo and Noor Ali in Isiolo; Writing by Richard Lough; Editing by Louise Ireland)
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