Negotiations are continuing with an armed gang holding up to 400 hostages at a school in southern Russia who have threatened to kill 50 children for every one of their number killed by security forces.
There was confusion over the exact number of hostages with initial reports putting it at 400. Local police then put it at between 125 and 150 but later raised the figure back to 300 to 400. The ITAR-Tass news agency said 132 children were among the hostages.
Mr Kazbek Dzantiyev, the region's interior minister said in Beslan in Russia's North Ossetia region the militants also warned they will execute 20 pupils for every fighter wounded.
The heavily armed terrorists, wearing suicide-bomb belts, seized the elementary school this morning and took several hundred hostages. They have threatened to blow up the school if a rescue attempt is made. It has been reported that children have been lined up against the windows of the school to prevent an assault by security services.
A gang of up to 17 men and women raided the building this morning with exchanges of gunfire ensuing when police arrived. Several explosions were also heard.
Seven people who were wounded when the gang stormed into the school have died in hospital of their wounds. Tass, quoting hospital officials, said this brought the number of civilians killed so far to eight. In addition, at least one rebel was killed in a gunfight with police in the early stages of the seizure.
A local resident waits for news as she stands outside the school seized by attackers in Beslan
Around 50 students managed to escape - some after hiding in the school's boiler room during the raid. Tass reported that the hostage-takers released a further 15 students.
One girl lay wounded on the grounds near the school, but emergency workers could not approach because the area was coming under fire. In a tense standoff, the militants placed a sniper on an upper floor of the building, and throughout the day the Russian media reported sporadic gunfire and the sound of explosions coming from the building.
Contact has been established with the armed gang and negotiations are under way, ITAR-Tass news agency said.
The hostage-takers are understood to be demanding the release of fighters detained in connection with a series of attacks on police facilities in neighbouring Ingushetia in June. The raids killed more than 90 people.
The attack in the town of Beslan on the first day of the Russian school year and a large number of parents had accompanied their children to class. The raid began just after a ceremony marking the start of the school year, when the attackers drove up in a covered truck of the type often used for troop transport.
Beslan is 10 miles north of Vladikavkaz, the capital of North Ossetia, a republic that borders warring Chechnya.
President Vladimir Putin, who broke his holiday to return to Moscow to deal with the latest in a wave of violence linked to separatist rebels in Chechnya, dispatched his interior minister and head of the FSB security service to the scene. The former spy-chief rose to power in 2000 on the back of his tough approach on Chechnya and has always refused to negotiate with separatists.
The UN Security Council has called an emergency meeting tonight, at the request of Russian Ambassador Andrei Denisov, to discuss a wave of deadly terrorist attacks in Russia.
Diplomats said the council planned to meet tonight to discuss the "threat to international peace and security" posed by the attacks, and likely would issue a statement at the meeting's end condemning the attacks.
Chechen separatists denied involvement in the school hostage and a bomb attack in Moscow yesterday. But Mr Akhmed Zakayev, UK-based envoy of rebel leader Mr Aslan Maskhadov, said he could not rule out the possibility Chechens could have been driven to such an act out of "despair" over Russian policy in their region.
"If it does turn out that they are Chechens and they make demands connected to the situation in Chechnya, then responsibility lies doubly with the authorities," Mr Zakayev said. "As long as there is no prospect for peaceful resolution, there are a great many people in Chechnya who may be driven by despair to such acts."
Previous hostage-taking involving Chechen rebels have all ended with huge loss of life. When Chechen rebels seized 700 hostages at a Moscow theatre in 2002, 129 hostages and 41 guerrillas were killed when Russian troops stormed the building using poisonous gas.
In 1995, Chechen rebels took hundreds of hostages in a hospital in the southern Russian town of Budennovsk. More than 100 died during the assault and a botched Russian commando raid.
President George W. Bush has condemned those behind the taking of hundreds of hostages in Russia and told Russian President Vladimir Putin that "we stand with the Russian people".
A White House spokeswoman said Mr Bush called Mr Putin from the White House before going on a campaign trip. "He condemned the taking of hostages and other recent terrorist attacks in Russia," she said. "He offered his condolences to the victims and to the Russian people. Both leaders stressed their strong commitment to working together to defeat global terrorism."
Agencies