A loud explosion has sent thick smoke billowing from the Westgate shopping complex in Nairobi where 69 people, including four Britons, have died in a raid by Islamic militants.
The blast was followed by other smaller detonations and volleys of gunfire as Kenyan troops laid siege to the four-story complex.
A security official told reporters at the scene: "It is us who caused the explosion, we are trying to get in through the roof."
Sky’s Stuart Ramsay said he had been told some of the al Shebaab terrorists had blown themselves up while others has been "taken out" by Kenyan special forces.
One of the Britons killed in the attack has been named in reports as Ross Langdon, who had dual nationality with Australia.
An architect, he apparently died alongside his girlfriend who was heavily pregnant, according to Australian media.
Colleagues of Mr Langdon told Sky News: "We were shocked at the news. Ross was the kind of guy who restored your faith in humanity - what a senseless waste."
The Kenyan Defence Force said earlier on its Twitter feed it was making every effort to bring the situation "to a speedy conclusion".
It said it has secured most of the four-storey mall, and many of the hostages have been rescued. Police say more were rescued overnight.
"We have managed to rescue more hostages overnight and very few are remaining," said Kenyan police chief David Kimaiyo. "We are also closing in on the attackers."
Officials said up to 15 may still be inside the building. They have apparently been using the remaining hostages as human shields and have threatened to kill them.
Al Shebaab spokesman Ali Mohamud Rage warned the hostages would "bear the brunt of any force directed against the mujahedeen".
Kenyan military spokesman Colonel Cyrus Oguna told Sky News: "We do not negotiate with terrorists and that position has not changed. Everyone who has been rescued is being checked to make sure none of the terrorists escaped during the dragnet."
Kenya's President Uhuru Kenyatta said there have been "numerous offers of assistance from friendly countries" to end the stand-off, but that for now it remains a Kenyan operation.
However, a Kenyan security source has confirmed that Israeli agents "are rescuing the hostages and the injured". The Westgate shopping complex is part Israeli-owned.
Britain's SAS is also reportedly helping out in an advisory role, along with US agents..
The Kenyan Red Cross says 69 people have been killed, at least 63 remain missing and around 200 have been injured. Five of these are said to be from the US.
Police have conceded the number of dead could be "much, much higher", after reports emerged that there are multiple fatalities still inside the centre.
The Foreign Office has confirmed Britons were among those killed and warned that number was likely to rise.
Prime Minister David Cameron is cutting short a visit to Balmoral to chair a meeting of the emergency response committee Cobra in London later today. Defence Secretary Philip Hammond chaired a Cobra meeting this morning.
Mr Cameron has described the attack on the shopping complex as "despicable" and an act of "appalling brutality".
Also killed were two Canadians, two French citizens, two Indian citizens, a South Korean, a South African, a Dutch woman and the former UN envoy Kofi Awoonor.
The Foreign Office is investigating claims that a female British terror suspect nicknamed the " White Widow " could be linked to the plot.
Samantha Lewthwaite, who was married to July 7 bomber Jermaine Lindsay, is wanted by Kenyan police over links to a suspected terrorist cell
In March 2012 it was reported that Lewthwaite, 29, who is originally from Aylesbury, Buckinghamshire, had fled across the border from Kenya to Somalia.
Ramsay said: "We know that she'd been in the area. She has been linked to a number of attack in east Africa and they have been trying to capture her.
"Interestingly she has been used in the past with planning and propaganda, not actual assaults, although there is some evidence she has been linked to at least one.
"It is difficult to know whether or not it is her. The government have said there have been reports of more than one woman involved.
"Al Shabaab is thought to consist of foreign nationals as well as people from Somalia. I've heard reports of one Briton being involved and someone from Canada as well."
Security forces have taken control of the upper and lower levels of the shopping complex, and an army spokesman told Sky News they were trying to secure the second floor where the terrorists may be hiding.
Other reports suggested the attackers were holed up in a toilet block next to a supermarket on the ground floor of the complex.
Mr Kenyatta said one of his nephews and his nephew's fiancee were among the people confirmed killed.
"They shall not get away with their despicable and beastly acts," the president said in an emotional speech to the nation. "We will punish the masterminds swiftly and indeed very painfully."
The attack is the worst in Nairobi since an al Qaeda bomb attack on the US embassy in 1998 that killed more than 200 people.
Judges at the International Criminal Court have adjourned the trial of Kenyan vice president William Ruto for a week to allow him to return home and help deal with the crisis.
Ruto and Mr Kenyatta face charges of crimes against humanity in relation to their role in coordinating a wave of violence that swept Kenya in the aftermath of the country's contested 2007 elections.
The Kenyan Red Cross has set up a webpage for anyone worried about friends or relatives who might be caught up in the siege.
:: A helpline has been set up for people in the UK who are concerned about relatives in Kenya: 020 7008 000.