UPDATE 4-Blast rocks Kenyan capital, more than 30 hurt
* Blast targets shopping mall in Nairobi during lunch hour
* Police investigate whether it was a bomb attack
* Kenya shilling weakens slightly
By Humphrey Malalo and Njuwa Maina
NAIROBI, May 28 (Reuters) - An explosion tore through a shopping complex in Nairobi's business district during Monday's lunch hour, wounding more than 30 people, an d police said they were investigating whether it was a bomb attack.
Police spokesman Eric Kiraithe said anti-terrorism police were combing the blast site in the city centre for clues, appearing to row back on an earlier suggestion by the police commissioner that a massive electrical fault might be to blame.
More than ten people have been killed in a string of attacks in Nairobi and the port city of Mombasa since Kenya sent troops into Somalia in October to fight al Qaeda-linked militants.
Nairobi has blamed the al Shabaab militants, who merged with al Qaeda earlier this year, for the surge in violence and kidnappings that has threatened tourism in east Africa's biggest economy and wider regional destabilisation.
"The investigating team is exploring the possibility that the blast was caused by criminals using an improvised explosive device," Kiraithe said in a statement.
Two shopkeepers told Reuters independently that they saw a man drop a bag inside the trading centre moments before the blast.
"He came into the shop twice, looking at T-shirts. He said he didn't have money so he left. Then he came back," said Irene Wachira. "(He was) three shops away from where I was. He left a bag and a few moments later we had an explosion. The roof caved in and debris started falling on us," Wachira said.
Prime Minister Raila Odinga said Kenyans would not be cowed by "terrorists".
A spokesman for Kenya Power, the country's sole electricity distributor, said initial investigations had ruled out any electrical malfunction.
Dense black smoke initially billowed through the building's collapsed roof and sirens blared as emergency service crews rushed to Moi Avenue, a major road running through the city.
A military helicopter hovered in the skies above downtown Nairobi and the security forces cordoned off nearby streets.
Medics applied bandages to the walking wounded, many of whom had been caught by flying glass, while some bystanders wailed in shock. Clothing, shoes and blown out windows littered the road.
Crowds carried away people seen with blood streaming down their faces. The police said 33 people had been wounded.
In the days after Kenya deployed soldiers across the border, al Shabaab warned Nairobi to withdraw from its southern strongholds or risk bringing the "flames of war" into Kenya.
In April, the U.S. embassy in Kenya warned of a possible strike on Nairobi's hotels and key government buildings, which it said was in the last stages of planning.
The recent attacks, however, have tended to target low profile institutions, such as bars and nightclubs, where security is typically relatively light.
"Maybe it is these al Qaeda people. They are wasting life for nothing. Just innocent people going about their business," said Wilfred Kimani who was several blocks away from the blast.
Outside Nairobi's Jamia mosque, one Somali refugee who identified herself as Aisha said she feared a backlash if al Shabaab or its sympathisers were behind the explosion.
"It's bad because Kenyans may get angrier now."
There have also been several attacks near the border with Somalia since Kenya's military incursion. At least five people were killed in two separate attacks in the remote region on Saturday.
The blast weakend the shilling 0.3 percent before the local currency recovered some of the losses, partly due to a sale of dollars by the Central Bank. It was not clear if the bank's intervention was a response to the market jitters caused by the blast.