Eye-witnesses reported hearing a loud explosion and pictures of the blaze on Curzon Street in Mayfair, central London, have been posted on social media.
The fire broke out in the extraction fan system of a restaurant next to the embassy and has spread across three floors.
The building has a number of flats above and around 40 firefighters are tackling the blaze.
It is not yet known what started the fire.
A London Fire Brigade spokesman said: "Six fire engines and around 40 firefighters have been called to a fire at a restaurant with flats above in Curzon Street in Mayfair.
"The restaurants extraction system from ground to third floor is alight.
"The Brigade’s 999 control officers have taken 15 calls to the fire.
"The Brigade was called at 0917. Fire crews from Soho, Lambeth, Chelsea and other surrounding fire stations are at the scene. The cause of the fire is not known at this stage."
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