Suspected Islamist militants have attacked hotels and a police station in the Kenyan coastal town of Mpeketoni, military officials say.
It is not yet clear if there are any casualties.
Kenya has suffered a number of militant attacks since 2011 when its forces entered neighbouring Somalia to combat al-Shabab fighters.
Kenya’s Standard newspaper said on its website the attackers had stolen weapons and vehicles from the police station, which was on fire.
It said local residents had fled to nearby forests.
The paper also quoted a witness as saying he had counted six bodies in the street, but this could not be confirmed.
Kenyan army spokesman Major Emmanuel Chirchir said gunmen entered Mpeketoni, a busy trading centre, and started “shooting people”.
The “assailants [are] likely to be al-Shabab,” Major Chirchir said.
He said surveillance aircraft were looking for the attackers.
Local police chief Hamaton Mwaliko told Reuters that the gunmen had hijacked a van in nearby Witu town to carry out the attack.
“They raided Mpeketoni police station first,” he said.
Mwanaisha Hamisi, Kenyan Red Cross co-ordinator for the region, said gunfire was first reported at 20:30 local time (17:30 GMT)
Nearby Lamu island is a popular tourist destination with ancient architecture that is listed as a Unesco World Heritage site. (BBC)