Addressing journalists Tuesday, Kenyan Police Commissioner Mathew Iteere said police had launched intense investigations to arrest the culprits behind the blast.

Iteere said: “We are not taking chances, we have increased our security presence all over the city, we want to ensure the city remains safe.”

Meanwhile a suspect linked to the blast is behind bars. The suspect was arrested on Monday night as the search for the attackers intensified, police said.

“There was a suspect who is in custody and he is being interrogated over the attack. He was arrested in Kibera slum,” Police Spokesman Erick Kiraithe said.

He said the suspect was being interrogated to determine if he had played any part in planning or executing the attack.

According to the police spokesman the suspect is being interrogated by detectives from the anti-terrorism police unit.

Earlier on Monday, Ugandan intelligence had issued an alert over an impending Al-Qaeda attack. Police in both Kenya and Uganda are investigating if the Nairobi attack had any link with the terror alert.

"At the moment, we cannot really say that there is a link, and we cannot deny if there is any [link]. But the best thing is to let the investigators do their work.”

The blast occurred near a Kampala coach bus that was about to depart for Uganda. And for the better part of Tuesday, the ill-fated bus partly blown up by the grenade was still parked where it was during the time of the incident.

The Uganda Inspector General of Police Kale Kayihura told journalists that he had "strong indications" that Islamist militant groups were planning terrorist attacks there over the Christmas period.

Ugandan authorities suspect that the blast threats are linked to a Somali insurgent group al-Shabab which has pledged allegiance to Al-Qaeda, and the Allied Democratic Forces, a Ugandan Islamist group.

Last July, during the FIFA World Cup, suicide bombers struck two Kampala bars, killing 76 people. Suspected bombers from Kenya were arrested over the attacks.

Hundreds of armed police officers have been patrolling the streets near the scene of the incident on the busy River Road Street.

Condolences

President Mwai Kibaki has sent a message of condolence to the families of those who perished following the blast and assured Kenyans that the Government had mounted comprehensive investigations and those behind the evil act would be brought to justice.

"The security of our people is paramount. No efforts will be spared to ensure that security is beefed up," said the President.

In their condolence messages, Muslim leaders also condemned those behind the suspected grenade and termed the acts as cowardly and ‘deserve condemnation from everybody’.

They urged the Government to thoroughly investigate the incident and take appropriate action against the culprits.