"Elves work hard all year to have everything ready for Santa's big night. These colorful explosives are just something to prevent possible problems."
Elf Grenades are seasonal gadgets that were available only during the Holiday Updatefor both the Holiday Update (2013) and the Holiday Update (2014). They where purchasable for 750 
for 5 grenades. You are no longer able to purchase them.
Beside the unique look, these hand grenades do a colorful explosion, comparable to a firework and the Easter Grenade.
They basically have the same stats as normal Hand Grenades , taking 2 seconds to detonate before wounding any enemy within the blast radius.
Respawnables - Elf Grenades
To know how to counter these grenades, click here.