An explosion hit a night club in Kenya's port of Mombasa on Sunday, killing one person, police said, a day after the U.S. embassy warned of an imminent attack on the city.
Mombasa, a popular holiday destination for Kenyans and foreigners, has been struck by a series of blasts since Kenya sent troops into Somalia in October to crush Islamist militants.
"I am seeing one body. We are trying to seal off the area as we wait for officers to establish what kind of an explosion it was," said Ambrose Munyasia, the region's top criminal investigation officer who was at the scene, told Reuters.
Local media said three people had been killed in the blast.
Eight people wounded in the explosion were taken to hospital, police said.
A witness, Esther Muthoni, said she heard three explosions at the night club, which is situated in a residential area.
She said a crowd had gathered at the club to watch the Euro 2012 quarter-final between England and Italy.
"I had just arrived and was having a drink as I waited for the football match to begin, then I heard an explosion, and another and another. I went down on my belly. Then I saw a car speed off and bodies lying all over," said Muthoni.
On Saturday, the U.S. embassy in Kenya's capital Nairobi warned of an imminent threat of an attack on Mombasa and asked all its workers to leave the coastal city.
The U.S. embassy also said it had also suspended travel for its officials to Mombasa until July 1.
Earlier on Sunday, the Kenyan government said it had written to the U.S. embassy to reverse its warning against travelling to Mombasa, terming it "a reckless advisory" and an act of "economic sabotage".
The acting head of the Public Service and Secretary to the Cabinet, Francis Kimemia, said Kenya had the capacity to contain any terrorism threats.
Police said on Saturday they had recovered suspected bomb-making material in a working-class area in Nairobi.
On May 15, attackers detonated three grenades outside a night club in Mombasa, killing a woman security guard.
Nairobi and other parts of Kenya have suffered a series of grenade attacks since Kenya sent troops into Somalia.
The U.S. embassy warning came days after police arrested two Iranians after seizing chemicals they suspected were going to be used to make explosives in Mombasa.