Man is reported to have fired shot while holding up to four people in French city

This article is more than 8 years old

This article is more than 8 years old

A gunman claiming links to al-Qaida was holding three employees of a bank hostage in southern France on Wednesday, not far from the former home of drive-by killer Mohamed Merah, who shot dead seven people in March, including three Jewish schoolchildren.

Map showing location of bank siege in France. Photograph: guardian.co.uk

Police were called to the CIC bank in an eastern suburb of Toulouse after the alarm was raised. Police, who immediately blocked roads and surrounded the building, said a man went into the bank around 10am local time and fired one shot shortly after staff refused to hand over cash.

Four hostages were taken, including one woman, who was released around 2.30pm local time.

Police have made contact with the gunman, who claims to have explosives and has demanded to speak to officers from Raid, the Paris-based elite special forces police brigade who negotiated with Merah during a 32-hour siege before shooting him dead. A bomb disposal team was at the scene.

The man is said to be 26 years old and known to the police. He reportedly tried to rob a jewellers before walking into the bank, where his demand for cash was not taken seriously.

The gunman's sister has told police he suffers from schizophrenia and had stopped his medication making him "particularly agitated", according the police outside the bank.

A relative is being brought to the scene to talk to him.

Merah killed three French paratroopers before turning his guns on a private Jewish school, where he killed a rabbi and three young children in March. He had also claimed links to al-Qaida.

One local woman who runs a restaurant next to the CIC bank told Paris Match she had heard a gunshot. Police have asked residents to remain at home, fearing the gunman could open fire if they attempt to evacuate the area.

"We have no idea if his claim to be linked to al-Qaida is serious or fantasy," a police union spokesman told Reuters.

On Wednesday, a school near the bank, where children were due to sit their baccalaureat examinations was evacuated.

It is the second time in a month Toulouse, known as the "pink city" because of the rose-coloured stone of its public buildings, has been the scene of a hostage-taking.

Two weeks ago, a 50-year-old man brandishing a shotgun took a security guard hostage at the headquarters of Météo France, the French weather service.

An elite squad of police marksmen shot the man, who remains in a critical condition in hospital. The security guard escaped without injury.

Cedric Delagean, an official for the police union, Unsa, told Reuters the hostage-taking appeared to be an attempted armed robbery that went wrong.

"The most probable hypothesis is that this guy is crazy, but that doesn't make him less dangerous," a police source told journalists at the scene, who were pushed back from the scene as police sharpshooters took up their positions around the bank.