The building caught fire immediately after the explosion, but firefighters extinguished the blaze that burned through the building's roof, the Kenya Broadcasting Corp. reported.
Some witnesses said they saw two men, possibly of Somali origin, toss an object inside the building just before the explosion. The witnesses said bystanders detained one of the men and held him until police arrived and arrested him.
Internal Security Assistant Minister Orwa Ojode warned against speculation on the blast's cause while reiterating the country is safe, The Daily Nation reported.
"We will make sure all residents in Kenya are safe," he said.
Several officials said the explosion could have been caused by an electrical failure, but firefighters at the scene discovered a 2-foot crater at the floor of the building, the Nation said.
Police Commissioner Mathew Iteere said police haven't found evidence indicating a grenade attack, NTV reported.
Internal Security Assistant Minister Orwa Ojode later said: "Police are investigating the possibilities of a grenade attack."
Wisconsin business offering 'therapeutic cuddling' forced to close
Trader Joe's: Car crashes into Long Island store, injuring 11