The gunmen ordered all Muslims to leave before carrying out rudimentary tests to see if hostages could recite the Koran and name the mother of the Prophet Mohammed.
Terrified shoppers fled and hid in storerooms, restaurants and a cinema, with the wounded being carried out in shopping trolleys.
Shoppers who were able to prove they were Muslim were among the 1,000 who escaped unharmed, while those who failed were shot for being ‘kafir', a derogatory term for non-Muslims. One man, who hid in a box of cartons, said: ‘If they had found me... I'm white and so I'm dead. They hate your skin colour.'
Those killed so far vary in age from two to 78.
A spokesman for Al Shabaab, the East African arm of Al-Qaeda, said all Britons in Kenya are ‘legitimate' targets because the UK has supported the African country's military intervention in neighbouring Somalia.
The Twitter account purporting to belong to the terrorist organisation also said ‘there would be no negotiations whatsoever'.