PARIS (AFP) – A man who took two people hostage in central Paris was transferred to a psychiatric ward Wednesday, a day after the four-hour standoff in which he doused a woman in petrol and held a knife to her throat.

The Moroccan-born 26-year-old was arrested on Tuesday evening after the hostage-taking at the offices of a company in a bustling area of the central 10th arrondissement known for its bars and restaurants.

Police stormed the building and arrested the man at around 8.00 pm after attempting to negotiate with him.

Sources close to the investigation said he had sprayed a woman with petrol and was holding a knife to her throat, while he had handcuffed the other male hostage.

BREAKING: 'Armed' Man Takes Several Hostages in Paris, Demands to Speak to Iranian Embassy https://t.co/CAmW3CmjXs — Breitbart London (@BreitbartLondon) June 12, 2018

Police managed to free the woman and neither hostage was injured.

A police source said investigators believed the hostage-taker may have been “mentally unstable” and that his motivations remained unclear.

The suspect, who was lightly injured during his arrest, had “made very clear statements about the Iranian embassy and then the government,” another police source said.

Paris prosecutors have opened a investigation into alleged kidnapping, armed violence, threatening behaviour and attempted murder.

The incident sparked alarm in the French capital, which like the rest of the country has been on high alert after a series of jihadist attacks over the past three years.

In the most recent incident last month, one person was killed in a Saturday night knife attack in Paris.