Mary Harper is Africa Editor, BBC World Service News

“Do you know what the Kenyan police call Somalis?” asked a successful Somali businessman from his office in downtown Nairobi.  “They call us ATM machines.  That’s because the only way we can navigate the situation here is to bribe the police at every turn.”  The man never uses his name in dealings with the authorities because it would be “commercial suicide”, and, to make things easier, he has a non-Somali business partner.

He has good reason to speak like this.  Life is becoming increasingly difficult for Somalis in Kenya.  They are treated with suspicion even though many of them are natives of the country.  In central Nairobi, I watched every ethnic Somali – identified by the security guard by their distinctive physical features — being scanned with a metal detector and searched as they entered an office block; non-Somalis were left alone.  In August this year, the Central Bank of Kenya directed all financial institutions in the country to monitor the transactions of Kenya-based Somalis suspected of having links with Islamist insurgents in Somalia.

But Kenya has reason to be nervous.  In September, the Kenyan police leaked to the media documents containing details of an Al Qaeda cell in East Africa.  They said the cell was behind July’s twin bomb attacks in the Ugandan capital, Kampala, which killed more than 70 people as they watched the football World Cup final.  The documents said dozens of young men in Kenya had joined the cell, had been trained in Somalia by the Al Qaeda-linked militia, Al Shabaab, which controls many southern and central regions in the country, and that they were planning an attack on Kenya.  In November, six young men were arrested in the Kenyan coastal town of Lamu on suspicion of being Al Shabaab supporters on their way to fight in Somalia.

Al Shabaab bombed neighbouring Uganda because it provides soldiers for the African Union peacekeeping force which protects the transitional government in the Somali capital, Mogadishu.  Kenya is also a target because it has been training Somali soldiers and police in the north-east of the country, and because it is seen as a key ally of the West in its ‘War on Terror’ in the Horn of Africa.

Prejudice against Somalis permeates many levels of Kenyan society.  On the one hand, they are feared and resented; on the other, they are admired for their business acumen.  “Somalis are very bad people,” said the taxi driver who took me to Eastleigh, the Somali district of Nairobi.  “They sell everything in Eastleigh, even weapons.  They are corrupt and they are always fighting because they are, by nature, a very violent people.  Somali pirates come here to Nairobi and buy expensive houses in the best districts.  Kenyans hate Somalis, but they are very good at business.”

It may be their success in business rather than their links to piracy and Islamist extremism that lies at the root of the hostility towards Somalis.  They were doing well in Kenya before the days of pirates and Al Shabaab.  Nowhere is their commercial success more obvious than in Eastleigh, which many people call ‘Mogadishu Kidogo’, which means ‘Mini-Mogadishu’ in Kiswahili.  It is a riot of hotels and shopping malls.  There are dozens of large buildings dedicated entirely to shopping:  Day to Day Centre, Bangkok Shopping Mall, Prestige Centre, Towhid Shopping Complex, Emirates Shopping Mall, Olympic Shopping Centre, Sunrise Shopping Mall…  The cheap prices and vast array of products attract shoppers from all over Kenya and elsewhere in East Africa.  There are several new buildings going up, some covered with expensive reflective glass, others many stories high.

Eastleigh is chaotic compared with the relative order of nearby downtown Nairobi, and its infrastructure is dilapidated.  There are potholes everywhere and many of the roads are unpaved; pedestrians have to navigate their way around open drains and mountains of uncollected rubbish.  Electricity and water supplies are erratic.  So bad is the provision of public services that this year residents of Eastleigh stopped paying local taxes.  Their decision was endorsed by a court.

Kenya has become a second home for much of Somalia’s political and business elite.  Displaced by conflict back home, some of them virtually live in hotels in Nairobi, or at least stay there for months on end.  In the Andalus Hotel in Eastleigh, I met a well-known businessman who has been staying there ever since Al Shabaab seized his hometown of Merca in southern Somalia more than two years ago.  The former foreign minister, Ismai’il Hurre Buba, has made what he describes as a “home from home” in the Andalus.  A few self-styled Somali ‘presidents’ base themselves in the hotel; they generally come from the diaspora and claim to be in charge of ‘independent’ regions of Somalia that are far too dangerous for them to visit let alone govern.

The Andalus is attached to the Eastleigh Mall.  Unlike many of the other shopping complexes, it is not a dark warren of endless kiosks, but a whole mini-world.  It has a state-of-the-art gym, a medical centre, a restaurant, a bank and a mosque.  There is Star FM which broadcasts in Somali and an internet cafe, both essential for keeping in touch with news about Somalis at home and in the diaspora.  Somalis have been quick to embrace modern communications technology, perhaps because it is such an effective and immediate way of bringing them closer together despite the fact that conflict has scattered them all over the world.

The troublesome relationship between Kenya and Somalia stretches back for decades.  Even before independence in 1960, Somalia was keen to include as part of its territory the Northern Frontier District of colonial Kenya, which bordered southern Somalia and was populated by a predominantly ethnic Somali population.  After prolonged negotiations, Britain decided it should remain part of Kenya, prompting Somalia to sever diplomatic relations with the UK.  Given the difficulties the region has given Kenya, it may in some ways regret that this restive stretch of land was not ceded to Somalia.

North-eastern Kenya has been especially tense in recent years following the occupation by Al Shabaab of much of the adjoining Somali territory.  Kenyan frontier guards are stationed almost within spitting distance of Islamist militiamen, and even though the border is officially closed, it is impossible to control because it is so long and porous.  Kenyan Somalis living in the region complain that young men are recruited by Al Shabaab and taken across the border to fight.  The huge refugee camp at Dadaab, home to some 300,000 Somalis, is also reported to serve as an Islamist recruiting centre.

Sometimes the conflict in Somalia virtually spills over into Kenya.  In October, fighting broke out in the frontier town of Belet Hawa between a clan militia and Al Shabaab.  Hundreds of people fled across the border into the Kenyan town of Mandera, which is only about three kilometres away from Belet Hawa.

With conflict so close by, Kenya has made it a priority to protect itself.  It is taking part in a regional programme to train Somali soldiers and police.  So far, it has trained about 2,500 people; it has been reported that some of the recruits are not Somali nationals, but Kenyans.  Hundreds of these freshly trained security forces were sent to Mandera in October after the fighting broke out in Belet Hawa.

Kenya is caught in a difficult position; it cannot afford to ignore the Somali problem but by taking part in the training of what is essentially a mini-Somali army on its territory, it invites increased hostility from Islamist groups, especially Al Shabaab.  Kenya’s cooperation with the United States and Europe in their ‘War on Terror’, and its EU-funded special piracy courts mean that some Somalis perceive it as an enemy.  As the documents leaked by the police suggested, an Islamist attack on the country is possible.  The authorities have to be vigilant, but they also have to be careful not to provoke the Somalis, especially as so many of them are citizens of Kenya or live there as refugees.  Kenya is unlikely to stage an Ethiopian-style invasion of Somalia, as this ultimately proved unsuccessful.  It is said that Al Shabaab believes it can march on Nairobi without difficulty; it reportedly sees Kenya as a soft-touch compared with Ethiopia which is perceived as being far more militarized and authoritarian.  Somalis like to joke that they need their army to deal with Ethiopia, whereas Kenya can be subdued by the police.

The current situation is uneasy, but Kenya has to achieve the delicate balance of protecting itself without being overly provocative.