Armed men and women claiming to be Chechens took a theater audience hostage in Moscow around 9pm on Wednesday, and threatened to blow up the building if the police stormed it, authorities said.
The Soviet Palace of Art was holding a performance of the musical Nord-Ost (North-East), one of the Russian capital's most popular productions.
Moscow police spokesman Valery Gribakin said that "the terrorists are demanding one thing -- the end to the war in Chechnya."
Police estimated the hostage count to be between 600 and 700 people. The Interfax news agency said one of its reporters was inside the theater at the time of the raid. She told them in a telephone call that the men fired automatic weapons into the air and were preventing the audience from leaving, the agency said.
Police said that there were up to 50 terrorists in the building, some of whom were armed with automatic weapons. Upon storming the stage, they allowed all members of the audience to make phone calls and proceeded to release about 100 people, mostly children, foreign nationals and Muslim audience members. Russian television confirmed that three German and three British citizens were still among those held.
A woman who made her way out of the theater said in an interview on Russia's NTV television that men wearing camouflage went on stage, fired in the air and said: "Don't you understand what's going on? We are Chechens. We are not hiding it."
According to Russian television, the gunmen also warned police not to storm the building and said that any dead gunman would result in 10 dead hostages.
Police units and an Alpha special forces unit went to the scene and sealed off the area. The Federal Security Service, the successor to the Soviet KGB, and the Interior Ministry put plan "Thunderstorm" into effect, which required all officers to report to their units.
The Interfax news organization was reporting that the gunmen were part of a Chechen rebel suicide unit under the command of Movsar Barayev, the nephew of field commander Arbi Barayev, who was killed in Chechnya. Interfax quoted the Chechen separatists-operated Web site Kavkaz.org as their source. The rebel unit includes 40 widows of rebels killed in Chechnya.
The site quotes Barayev's demands on the withdrawal of Russian federal units from Chechnya and says that bombs have been planted in the building. The group is in Moscow "to die, not to survive," he said.
According to the reports filed by the Izvestiya newspaper, Aslanbek Aslakhanov, member of the national parliament representing Chechnya, and Rusan Hasbulatov, a former Russian Supreme Soviet Chairman of Chechen heritage, were headed inside to negotiate with the gunmen. They are to discuss an immediate plan, trading 50 hostages for the opportunity to talk to Ahmad Kadyrov, the current head of the Chechen administration.
Speaking to Russian television beforehand, Aslakhanov pleaded with the gunmen to let the remaining female hostages go because "real Chechens" do not kill innocent women. He also reminded the hostage-takers that, contrary to their desires, this action would only hurt the Chechen cause.
Alexander Tsekalo, the musical's producer, told Russian television that the theater holds 1,163 audience members; approximately 60 actors and 35 musicians are involved in the production and about 35 theater personnel are present at every performance. He speculated that about 1,000 people would be in the building for a regular Wednesday performance.
A young boy who was allowed to leave told Russian television that the gunmen had warned audience members that they had planted explosives around the theater. He also confirmed that the gunmen had complexions as though from the Caucasus region, and communicated with each other in a non-Russian language.
Russian President Vladimir Putin was immediately told of the hostage taking, Interfax reported.
The Associated Press contributed to this report.