Up to 700 people were taken hostage last night when a group of heavily armed men and women stormed a packed Moscow theatre during a musical, firing shots in the air.
Russian police said that the gang of up to 50 assailants demanded the immediate withdrawal of Russian troops from Chechnya, and said they were prepared to die for their cause.
They burst on to the stage during the second act of a hit musical, firing shots into the ceiling. They ordered the cast off stage, then told all children to leave the theatre. There were reports that Muslims had also been allowed to leave.
Members of the audience said that the gunmen had land mines strapped to their bodies and had drilled holes in the theatre structure and filled them with explosives.
The gunmen - who are said to be led by a nephew of Chechen warlord Arbi Barayev - burst into the theatre in the south-east of the Russian capital after arriving in a white minibus at 22.15pm local time (19.15pm BST).
The Russian Interfax news agency, one of whose reporters was in the theatre at the time, said the gunmen had let members of the audience make phone calls.
The NTV channel established a connection to one of the hostages who, petrified, begged police not to storm the building for fear that the assailants would detonate explosives and kill them all.
One boy who was allowed to leave the theatre, Denis Afanasiev, 13, said: "We were about 18-20 in number and they let us go out." The boy said he saw women among the gunmen and that all of them had mines strapped to their bodies.
President Vladimir Putin called an emergency council with his closest advisers at the Kremlin late last night, seeking a way out of the worst terrorist crisis Moscow has faced since a spate of apartment bombings in 1999, when hundreds were killed.
Early this morning, two leading members of the Chechen community with experience of negotiating in hostage dramas entered the theatre. Interfax news agency reported that Aslanbek Aslakhanov, the deputy who represents Chechnya in the state duma lower house of parliament, and Ruslan Khasbulatov, a former speaker of parliament, tried to kickstart negotiations with the gunmen.
One member of the audience who was watching the production of North-East, one of Moscow's most popular shows, said in an interview broadcast live on Russia's NTV television that men wearing camouflage dress had shouted: "Don't you understand what's going on. We are Chechens."
Elite police teams, including the Alpha counter-terrorist unit, were at the scene in the mainly working-class district of the city.
Police units sealed off the area in the freezing, wet weather and evacuated nearby buildings. There were no ini tial reports of casualties, although a Guardian reporter heard automatic gunfire outside the theatre several hours after the initial siege.
Police said they believed up to 700 people were attending the show but exact numbers remained unclear. There was deep unease that so many gunmen could drive into the heart of Moscow through tight anti-terrorist security installed since the 1999 bombings.
A man close to tears told a Reuters correspondent: "My friend's wife is trapped inside. She said there are about 700 people trapped inside."
One eyewitness, Philip, 17, a student who lives 10 houses down the road from the theatre, said: "I came out of the shop and I heard an explosion and automatic gunfire from inside the building. There was one big noise. The police arrived very quickly."
Alexei, who lives on the fourth floor of an apartment block to the left of the building heard the initial assault and watched from his window as about 20 young women and children left the theatre by the front exit.
Although Russian officials have repeatedly said they are winning the war in Chechnya, which revived in 1999, fighting has been particularly intense in recent weeks.