Army rebels in the tiny West African island state of Sao Tome and Principe have declared a "junta of national salvation" after toppling the government, saying they were responding to the country's "decline".
The country was last shaken by a coup in 1995
A man in civilian dress surrounded by armed soldiers read out the announcement on state television hours after the dawn coup, which appears to have been largely bloodless.
Nigeria, the regional superpower, has condemned it along with other African states and Portugal, the former colonial power.
Sao Tome and Principe, one of the world's poorest states, is expecting a windfall from offshore oilfields due to begin producing within four years.
The rebels said in their statement that they had dissolved all national institutions and would shortly form a government for an unspecified "transition period".
Sao Tome has one of the world's highest foreign debts
Oil production expected to start in 2006-7
The auctioning of oil permits in 2004 is due to net $100 million
Sao Tome will receive 40% and Nigeria 60% of eventual oil revenue
Having seized the prime minister and other key officials, they pledged not to harm any members of the deposed government.
The Nigerian Government, which is a partner in the oil project, said it condemned "unequivocally" the coup which violated the democratic process and the principle of the African Union (AU).
Mozambican President Joaquim Chissano, the AU's chairman, appealed for a speedy return to "constitutional order" and a grouping of former Portuguese colonies has also condemned the coup.
Sao Tome Foreign Minister Mateus Meira Rita said from Portugal that the ousted government wanted talks with the coup-leaders aimed at the "immediate restoration of constitutional order".
The rebels appear to have exploited the absence of President Fradique de Menezes who is reported to be on a private visit to Nigeria.
Gunshots and exploding rockets and grenades were heard in the capital, Sao Tome, around 0300 GMT and sporadic firing continued throughout the morning but there were no indications of casualties.
Sao Tome residents hope oil wealth will transform their lives
The rebels took control of government buildings, state TV and radio, the central bank and the airport.
They seized Prime Minister Maria das Neves along with head of the National Assembly Dionisio Dias, Defence Minister Fernando Daqua and Natural Resources Minister Rafael Branco.
Mr Branco is considered a key member of the government as he handles the oil portfolio.
Political analyst Antonio Agiar, who is in Sao Tome, told the BBC's Network Africa programme that the capital was pretty calm by around 0700 GMT and the sound of shooting had stopped.
"There are people on the streets but less than usual," he said.
The Portuguese ambassador, Mario de Jesus Santos, said he was unaware of any "physical confrontations".
The rebels' leader has been named by the Portuguese news agency Lusa as Major Fernando "Cobo" Pereira.
Foreign Minister Meira Rita said the coup had been led by a unit of soldiers who had received training in South Africa.
Correspondents say the army, which led the last coup in 1995, has been complaining of low pay and poor living conditions in recent months.
In a brief, initial speech on national radio, Major Pereira ordered all members of the government and parliament to report to police stations.
In their later statement, the rebels said they had acted in response to the "continuing social and economic decline of the country".
Alex Vines from the Royal Institute for International Affairs told BBC World that he suspected that control of the oil money is behind the coup.
Last year, the United States was considering increasing military co-operation with the Sao Tome Government amid reports that the US was trying to buy more West African oil.
Portugal's ambassador went into talks with the rebels on Wednesday afternoon in a bid to clarify their demands.