By Linda Muriuki and Nicolo Gnecchi

NAIROBI, Dec 18 (Reuters) - Kenyan police have arrested a British national on suspicion of possessing illegal arms, including hand grenades, which were seized in the east African country last week, a senior police source said on Monday.

"The police are investigating him for possession of illegal firearms among other things," the source told Reuters.

The head of a Kenyan Muslim human rights group said the man, Graham Andrew Adams, who converted to Islam as a teenager, told him he was arrested by anti-terrorism police in the port city of Mombasa last Tuesday before being taken to Nairobi.

"The police claim to be investigating terror charges," said Al-Amin Kimathi who visited Adams, 31, in a Nairobi police station on Tuesday.

He said Adams was questioned about links to six Kenyan men arrested last Thursday with grenades in the capital's Eastleigh estate, home to thousands of Kenyan Somalis and Somali refugees.

The group was due to appear in court later on Tuesday.

"He was asked to identify photographs of other alleged terror suspects, two of whom are in court today. He says he knows one who is a business contact in Nairobi," Kimathi said.

He said Adams, who comes from Manchester, became a Muslim at the age of 18 and also went by the name Ahmad Halid Adams.

He had been coming to Kenya for the past seven years, and wanted to open a restaurant in Mombasa, Kimathi said, adding that Adams' visa had expired while in custody.

A spokeswoman for the British High Commission in Nairobi said Adams had been arrested on immigration charges.

"We've requested consular access, but it's not been granted yet," she added.

Security remains a concern in Kenya which suffered two bombings by al Qaeda-linked militants in 1998 and 2002.

In the first incident, suicide bombers blew up the U.S. Embassy in Nairobi killing more than 220 people. Four years later, 15 people were killed when an Israeli-owned hotel near Mombasa was blown up. (Additional reporting and writing by Katie Nguyen, Editing by Bryson Hull and Elizabeth Piper)

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