Kenya's police chief says 48 people have been killed in a militant attack on a town close to a popular coastal resort.

Suspected Islamist insurgents raided a police station and "set on fire" at least three hotels and a petrol station.

The group of gunmen entered the western coastal town of Mpeketoni and started "shooting people around in town", the interior ministry said.

The assault began at around 8pm on Sunday, with gunshots reported up to four hours later.

Cafes and bars were reported to have been busy with people watching the World Cup on television.

It was not immediately clear how many attackers were involved.

Area police chief Hamaton Mwaliko said: "Attackers hijacked a van from Witu town which they used for the attacks. They raided Mpeketoni police station first and opened fire.

"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."

No-one claims responsibility

Kenyan army spokesman Major Emmanuel Chirchir said the "assailants (were) likely to be al Shabaab", Somalia's al Qaeda-linked insurgents.

However, no group has claimed responsibility.

Kenya has seen a drop in tourists in recent months following a string of gun and grenade attacks blamed on al Shabaab, Somalia's al Qaeda-linked insurgents, or its sympathisers.

Mpeketoni lies on the mainland some 30km southwest of Lamu island, a popular tourist destination.

Al Shabaab suspected

Al Shabaab, which has fought a bloody seven-year campaign to impose its interpretation of Islamic law inside Somalia, has said it wants to take revenge for Kenya's deployment of troops in the Horn of Africa nation.

In May, explosions in Nairobi and Mombasa led Britain, the US, France and Australia to issue warnings about travel to the east African country.