Suspected Islamist militants have attacked hotels and a police station in the Kenyan coastal town of Mpeketoni, military officials say.
Witnesses reported seeing buildings on fire and hearing gunfire in the town, which is near Lamu island.
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.
"Some hotels in the town are on fire. We don't know how many casualties are there for now. We understand the attackers have already fled but our officers are pursuing them."
Nearby Lamu island is a popular tourist destination with ancient architecture that is listed as a UNESCO World Heritage site.