At least two people were killed by double grenade blasts at a busy restaurant popular with Westerners in Djibouti, police have said.
"It's a criminal act. We have two people dead and 11 wounded. It was grenades," Colonel Omar Hassan, head of policein Djibouti city, said in an interview.
It was not immediately clear who was behind the attack.
Djibouti has the only US military base in Africa and is an important ally in the US-led fight against militant Islam.
The former French colony's port is also used by foreign navies protecting the Gulf of Aden's shipping lanes, some of the busiest in the world, from Somali pirates.
It has also contributed troops to the African Union Mission in Somalia. Other contributing countries, Kenya and Uganda, have in the past been hit by gun and bomb attacks by Somalia's al-Qaeda-linked Shabaab insurgents.
Somali troops and AMISOM, comprising troops from Uganda,Kenya, Burundi and Djibouti, drove al Shabaab out of Somalia'scapital, Mogadishu, in 2011.
On Saturday, al Shabaab attacked the parliament in Somalia, killing at least 10 security officers.