Al-Shabaab, al Qaeda's proxy in Somalia, claimed responsibility, and said it was not backing down. In a message on its Twitter feed, the group said "all Muslims" were escorted from the mall before the attack.
"When justice is denied, it must be enforced," it said in a tweet Sunday. "Kenyans were relatively safe in their cities before they invaded us & killed Muslims #Westgate"
Since Kenya launched attacks against Al-Shabaab in Somalia in 2011, the group has hurled grenades at Kenyan churches, bus stops and other public places.
Last year, the Kenyan military played a major role in handing Al-Shabaab forces a defeat when as part of a peacekeeping mission, they liberated the key Somali port of Kismayo.
The attack Saturday targeted a popular weekend meeting spot. Kenyans and expatriates gather at the luxurious Westgate Shopping Mall on weekends to drink lattes, catch a movie or browse through the more than 80 stores.
Police in Kenya grew irritated as people took to social media to describe what they were seeing and hearing.
"If you must Facebook or tweet, then talk about football or your favourite music but NOT MISINFORM the public on security operations!" authorities said on Twitter.
Three injured security forces were taken out of the besieged mall, but the severity of their injuries was unclear.
By Sunday afternoon, at least 1,000 people had been freed from the mall, Kenyatta said. But some 30 people were believed to still be held.
Later, that number fell to no more than 10, military spokesman Cyrus Oguna told CNN affiliate KTN.
"The number that is still left in the building is very, very small," he said, without providing details on how people got out.
One apparent hostage left the building Sunday, and said she had been hiding in the basement of the mall, KTN reported.
Al-Shabaab vowed not to negotiate with Kenyan authorities.
"The Mujahideen are still strong inside #Westgate Mall and still holding their ground," the group tweeted late Saturday.
Israeli special forces were at the scene and were working with their Kenyan counterparts in the hostage crisis, Kenyan government sources told CNN.
Kenyatta said several nations had offered help but "this remains an operation of the Kenya security agencies."
State House spokesman Manoah Esipisu said there were reports of a white woman among the hostage takers. Kenyan intelligence officials were investigating the claims, he said.
Esipisu was asked if the reported woman was thought to be the infamous Al-Shabaab-affiliated "White Widow," Samantha Lewthwaite. "Nothing is being ruled out," he said.
But CNN terrorism analyst Peter Bergen said it was unlikely.