Detectives from FBI and Scotland Yard on Tuesday shut down a suspected terror cell in Likoni, Mombasa.
It has been registered as a madrassa and a rehabilitation center.
Two Islamic preachers from the Al Madrasatul Falan cell were arrested in the covert operation and more than 90 children were taken to police custody.
The children are from as young as five and said to be from different countries including US, UK, Canada, South Africa, Saudia Arabia, Somalia, Zambia, Uganda and Kenya.
They are being questioned at the Coast Regional Police Headquarters.
Officers are seeking to establish who their parents are, whether they have been undergoing indoctrination and if they have undergone physical or sexual abuse.
The religious leaders
were handed over to the officers from Anti-Terrorism Unit and Director Criminal Investigation for interrogation.
A senior officer leading the operation told The Star that the UK government is interested in one captive, a Syria returnee from UK, traced to the Madrasa.
Detectives say the 20-year-old has valid travel documents and was sent to the center by his parents. He is alleged to be an IS member.
"He was sent to the country as part of the punishment,” the officer who sought anonymity said.
It has emerged the UK contacted the Interpol and Directorate of Criminal Investigation department to assist tracing him.
The madrassa has both boarding and day scholars and hosts several children, including refugees from Somalia.
The UK is grappling with home grown terror group behind recent bombings. Most terror suspects who struck are said to be refugees from Iraq and Syria. The refugees were instrumental in the strike at the two London Subway attacks in September this year.
Arrested foreign kids will be repatriated, a officer handling the case divulged in confidence.
"Kenyans will be handed back to the parents after intensive interrogation over any torture," the officer said.
Grace Ndiragu, officer in charge of anti Human Trafficking and Child Protection Unit in the DCIO, said they raided cell following cases of mistreatment of kids.
"We received two cases of child abuse from the parents and decided to conduct an operation.They will be interrogated and profiled before they can be released back to the family.” she at the site.
Some parents whose children have been arrested have said the raid was unlawful and victimising.
A similar raid was conducted in Isiolo recently.