Two people were killed on Friday by a hand grenade thrown at men chewing narcotic leaf inside the world's largest refugee camp near Kenya's border with Somalia, a local government official said.

The men targeted were chewing khat, a mild narcotic popular among Somalis, in the early evening in a restaurant in the Dadaab camp, District Commissioner Albert Kimathi said.

"Two people are dead. We are yet to establish the motive of the attack and no arrests have been made so far," Kimathi said.

A Kenyan official said more than 100,000 refugees must now head to Dadaab in the country's remote east. Amnesty International said the order breached international law.

Violence has surged in Kenya, the region's biggest economy, since Nairobi sent troops into Somalia more than a year ago, raising fears of insecurity ahead of a general election in March.

Dadaab is home to nearly half a million refugees, the vast majority of them Somalis who have fled more than two decades of war and famine.