(CORRECTS to show BASF not located in 14 Riverside Drive as indicated by office complex's website)
* Fleeing office workers say some colleagues still inside
* Doors of hotel blown off, gunfire ongoing
* Police treating it as a terrorist attack
By George Obulutsa and Baz Ratner
NAIROBI, Jan 15 (Reuters) - Gunmen blasted their way into a hotel and office complex in the Kenyan capital on Tuesday, killing at least seven people and sending workers diving under desks from an attack claimed by Somali Islamists al Shabaab.
Police warned the "terror attack", which echoed a 2013 assault on a Nairobi shopping centre, may be ongoing, with assailants still inside the upscale 14 Riverside Drive complex.
Nairobi is a major expatriate hub, and the compound attacked houses offices of various international companies
"The main door of the hotel was blown open and there was a human arm in the street severed from the shoulder," said Serge Medic, the Swiss owner of a security company who ran to the scene to help when he heard of the attack from his taxi driver.
Medic, who was armed, entered the building with a policeman and two soldiers, he said, but they came under fire and retreated. An unexploded grenade lay in the lobby, he said.
"One man said he saw two armed men with scarves on their head and bandoliers of bullets," Medic told Reuters, as gunfire echoed in the background.
Kenya has often been targeted by al Shabaab, who killed 67 people at the Westgate shopping centre in 2013 and nearly 150 students at Garissa university in 2015. Al Shabaab says its attacks are revenge for Kenyan troops stationed inside Somalia, which has been riven by civil war since 1991.
More than three hours after Tuesday's attack began, small groups of workers were still being taken out by officers escorting them to armoured vehicles. Foreign security advisors on the site scrambled to make sure their clients were safe.
Kenyan police chief Joseph Boinnet said the attack began with an explosion targeting cars followed by a detonation from a suicide bomber. As he spoke, a Reuters reporter on the scene reported heavy gunfire then an explosion shortly afterwards.
At least seven people were killed and eight wounded, hospital officials and witnesses told Reuters.
A security guard said four bodies had been carried out in bags at the ICEA insurance company's offices.
Two further bodies were put into bags at I&M bank, said a medic, and one person died at MP Shah hospital.
A woman shot in the leg was carried out and three men emerged covered in blood. Some office workers climbed out of windows. Many told Reuters that they had to leave colleagues behind, still huddled under their desks.
"There's a grenade in the bathroom," one officer yelled as police rushed out from one building.
"We heard a loud bang from something that was thrown inside. Then I saw shattered glass," Geoffrey Otieno, who works at a beauty salon in the complex, told Reuters.
"We hid until we were rescued."
Al Shabaab, which wants to overthrow the weak, U.N.-backed Somali government and impose strict Islamic law, quickly said it was responsible. "We are behind the attack in Nairobi. The operation is going on," Abdiasis Abu Musab, the group's military operations spokesman, told Reuters by telephone in Somalia.
According to its website, 14 Riverside is home to local offices of international companies including Colgate Palmolive , Reckitt Benckiser, Pernod Ricard, Dow Chemical and SAP, as well as the dusitD2 hotel, part of Thai group Dusit Thani.
Kenya is a base for hundreds of diplomats, aid workers, businessmen and others operating around east Africa.
The Australian embassy is across the road from the compound.
"I just started hearing gunshots, and then started seeing people running away raising their hands up and some were entering the bank to hide for their lives," a woman working in a bank in the complex said, adding she heard two explosions.
Kenyan television featured appeals for blood from local hospitals and showed police cordoning off the route to ensure vehicles could move quickly. Red Cross ambulances ferried victims away.
Kenyan troops, concentrated in south Somalia, originally went into Somalia to try to create a buffer zone along the border. They are now part of an African Union peacekeeping force. (Additional reporting by Katharine Houreld, David Lewis, John Ndiso, Hereward Holland, Humphrey Malalo and Duncan Miriri in Nairobi and Feisal Omar in Mogadishu; writing by Katharine Houreld; Editing by Robin Pomeroy and Andrew Cawthorne)