* Loud blasts, then thick smoke billows from mall
* Minister says militants started fire, siege nears end
* Unclear how many hostages held, death toll at least 62
* Somali Islamists linked to al Qaeda claim responsibility
* Group wants withdrawal of Kenyan troops from Somalia
By Matthew Mpoke Bigg and Richard Lough
NAIROBI, Sept 23 (Reuters) - Thick smoke poured from the besieged Nairobi mall where Kenyan officials said their forces were closing in on Islamists holding hostages on Monday, the third day since Somalia’s al Shabaab launched a raid that has killed at least 62 people.
It remained unclear how many gunmen and hostages were still cornered in the Westgate shopping centre, after a series of loud explosions and gunfire were followed by black smoke billowing from one part of the complex.
Following a pattern of the past three days, bursts of gunfire and activity have been followed by long lulls.
Kenyan Interior Minister Joseph Ole Lenku told a news conference that militants had set fire to mattresses in a supermarket on the mall’s lower floors. His ministry later said the blaze was under control.
Ole Lenku said two attackers were killed on Monday, taking the total of dead militants so far to three, and added that none of the raiders was female although some had dressed as women. However, a security source and two soldiers said one white woman attacker had been killed.
President Uhuru Kenyatta dismissed on Sunday a demand that he pull Kenyan forces out of neighbouring Somalia.
Kenyatta, who lost one of his own nephews in Saturday’s bloodbath, said he would not relent in a “war on terror” in Somalia, where Kenyan troops have pushed al Shabaab onto the defensive over the past two years as part of an African Union-backed peacekeeping mission across the northern border.
The gunmen came from “all over the world”, Julius Karangi, chief of the Kenyan general staff, without giving nationalities. “We are fighting global terrorism here,” he said.
In Washington, officials said they were monitoring efforts by al Shabaab to recruit in the United States but they had no direction information of any involvement by Americans in the Nairobi attack. President Barack Obama said Washington was offering Kenya all the cooperation it could in handling what he called a “terrible outrage”.
Security officials near the mall said the explosions heard at lunchtime were caused by Kenyan forces blasting a way in, but Ole Lenku said he had no information on any blasts and a military spokesman declined to comment on them.
Al Shabaab said it would kill hostages if police moved in.
Echoing other officials, who have highlighted successes in rescuing hundreds of trapped people after Saturday’s massacre, Ole Lenku said most of the complex was under the authorities’ control and escape was impossible.
“We are doing anything reasonably possible, cautiously though, to bring this process to an end,” Ole Lenku said, while another top police officer said Kenyan forces were “closing in”.
“The terrorists could be running and hiding in some stores, but all floors now are under our control,” the minister said.
Despite the minister’s assertion that all the attackers were men, one intelligence officer and two soldiers told Reuters that one of the dead militants was a white woman. This is likely to fuel speculation that she is the wanted widow of one of the suicide bombers who attacked London’s transport system in 2005.
Called the “white widow” by the British press, Samantha Lewthwaite is wanted in connection with an alleged plot to attack hotels and restaurants in Kenya. Asked if the dead woman was Lewthwaite, the intelligence officer said: “We don’t know.”
Ole Lenku acknowledged “support” from foreign governments but said Kenyan forces were managing without it so far. Western powers have been alarmed by a spread of al Qaeda-linked violence across Africa, from Nigeria and Mali in the west, though Algeria and Libya in the north to Somalia and Kenya in the east.
Nairobi saw one of the first major attacks by al Qaeda, when it killed more than 200 people by bombing the U.S. embassy in 1998. Some analysts said the latest raid may show al Shabaab lashing out in its weakness after being pushed back in Somali, but the risk of further international violence remains.
On Sunday, President Kenyatta said 10 to 15 assailants were holding an unknown number of hostages in one location, apparently the supermarket. On Monday, it was not clear whether they may be more dispersed, including on the upper floors.
A spokesman for al Shabaab warned they would kill hostages if Kenyan troops tried to storm their positions. “The mujahideen will kill the hostages if the enemies use force,” Sheikh Ali Mohamud Rage said in an online audio statement.
On Twitter, the group posted: “They’ve obtained large amounts of ammunition and are, by the blessings of Allah alone, still firm and still dominating the show.”
The Red Cross and Ole Lenku put the death toll so far at 62. The Red Cross said it had also recorded 63 people as missing.
British Defence Secretary Philip Hammond said he believed six Britons had been killed in the attack. Other foreign victims include citizens of China, Ghana, France, the Netherlands and Canada.
Survivors’ tales of the assault by squads of attackers throwing grenades and spraying automatic fire have left little doubt the hostage-takers are willing to go on killing. Previous raids around the world, including at a desert gas plant in Algeria nine months ago, suggest they are also ready to die.
It remains unclear who the assailants are. Al Shabaab - the name means “The Lads” in Arabic - has thousands of Somali fighters but has also attracted foreigners to fight Western and African Union efforts to establish a stable government.
Kenya’s president, son of post-colonial leader Jomo Kenyatta, is facing his first major security challenge since being elected in March. The crisis might have an impact on his troubles with the International Criminal Court at The Hague.
Judges there let his vice president, William Ruto, fly home for a week, suspending a trial on Monday in which Ruto is charged with crimes against humanity for allegedly coordinating violence after an election in 2007. Kenyatta is due to face trial on similar charges in November.
Al Shabaab’s siege underlined its ability to cause major disruption with relatively limited resources, even after Kenyan and other African troops drove it from Somali cities.
“While the group has grown considerably weaker in terms of being able to wage a conventional war, it is now ever more capable of carrying out asymmetric warfare,” said Abdi Aynte, director of Mogadishu’s Heritage Institute of Policy Studies.
Al Shabaab’s last big attack abroad was a double bombing in Uganda that killed 77 people watching soccer on TV in 2010.