At least two men set fire to The Funky Dogo, which is located in the Olympus hotel building, after reportedly entering the bar, ordering patrons and staff to leave, dousing it in petrol and setting it alight.
The incident happened shortly before 7pm last night.
Two people were treated in hospital as a precaution. The bar, which was renovated some months ago, was destroyed.
The fire also affected nearby shops but was prevented from spreading to the hotel.
PJ police are investigating.