Three men are being questioned this evening after a businessman and his family were held hostage overnight in an incident being connected to the IRA.
Officers believe a gang was trying to extort money from Gary O'Donovan, the owner of a major chain of off-licences in Cork city.
It is understood at least one of those being held has links to the IRA but it is not clear whether it is the Provisional IRA or a splinter faction.
Two masked men broke into a house in Mount Oval Village, Rochestown, on the outskirts of the city at around 9pm last night and held Mr O'Donovan's wife Katie hostage while they waited for her husband to return.
When he arrived home at 10pm, he was beaten and had a cloak placed over his head. They were held in separate rooms for five hours. However, the man guarding him upstairs fell asleep and Mr O'Donovan escaped to raise the alarm.
Gardaí from across Cork city surrounded the house and brought in a trained negotiator in the event of a hostage situation developing. They later arrested two men and recovered a handgun and a stun gun.
A third man was arrested around noon in the Dublin area, a Garda spokesman said.
Mr O'Donovan required treatment in Cork University Hospital for a head wound and later discharged. His wife, who is six months pregnant, was unharmed and the couple's four children slept through the ordeal.
The men arrested in Cork - one in his 30s and the other in his 40s -were being held in Togher Garda station under Section 30 of the Offences Against the State Act.
"They are being questioned about false imprisonment and aggravated burglary," he said.