Two men armed with weapons including a hand grenade were arrested next to the Kuwait embassy today, but police said they were not planning a terrorist attack.

The two men, both Malaysians, were arrested before dawn after police tailed the car and stopped it in front of the embassy in the centre of Kuala Lumpur.

"They had one hand grenade, a pistol made in China and a knife, nine inches (23 centimetres) long," said the area police chief, Mohamad Zulkarnian Abdul Rahman.

He said the car was stopped because the men were behaving suspiciously and were suspected of having been drinking.

"We stopped the car on the road and from checking, we found the things," he told AFP . "It was just beside the Kuwaiti embassy ... coincidentally we stopped them there.

He said the men were being questioned over the weapons but were not believed to be targeting the Kuwait embassy or the nearby Indonesian mission.

"It's not terrorism, maybe they were drinking. We suspect they are trying to do certain crimes, but not bomb the embassies," he said.

The Kuwait embassy also discounted any terrorist threat after speaking to police.

"They led us to believe that these are local criminals ... We are taking their word for it that this is a domestic issue," said the embassy's counsellor, Ayman al Adsani.

"There is nothing to convince us that this is related to terrorism or to our embassy," he told AFP .