A siege at the Swedish embassy in Moscow has ended with the hostage-taker being shot dead.

The armed man, who reportedly had a grenade, was holding a hostage in a car inside the embassy grounds. He was killed in a gun battle with Russian special-force police.

The Swedish hostage identified as Jan-Olaf Nystrew in his car after being grabbed.

The hostage was a Russian security officer. He had earlier taken the place of a Swedish embassy employee, Jan-Olaf Nystrew, in a deal arranged by negotiators.

The gunman was demanding a $3m ransom.

The ordeal lasted for several hours as police tried to end it peacefully.

Russia's security chief, Nicholi Kovalyov, went to the scene, which had been cordoned off by police.

The identity of the hostage-taker is unknown. But according to one report he is believed to be a Russian national.

A Russian news agency quoted police as saying the man appeared to be unstable and kept grabbing the pin of the grenade.

It is not clear why the attacker chose to target the Swedish embassy.

A spokesman at the embassy said the man had not demanded anything from Sweden itself.
 

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