TBILISI, Georgia  

An armed man took a number of people hostage Wednesday at a bank in the former Soviet republic of Georgia, according to the country’s Interior Ministry.

In a statement, the ministry said that around 2:21 p.m., the masked gunman stormed the bank, located on Zviad Gamsakhurdia Street in the western city of Zugdidi. 

It said local police cordoned off the area and launched an operation.

"At this moment, law enforcers are mobilized on the spot and investigative and operative measures are underway," it added.

Speaking to a local television channel, a hostage said the suspect was demanding $500,000 in cash and a guarantee to leave the area safely, adding there were around 20 hostages inside the bank.

The man, who was dressed in a military uniform, said he would begin killing hostages one by one if the police did not meet his demands.

The security units subsequently withdrew from the area surrounding the bank. 

The gunman, who was holding a grenade in his hand, took three of the hostages with him, including one who had been acting as a police negotiator, and fled the scene. 

The remaining hostages were set free. 

A search remains underway for the gunman and the hostages. 

*Writing by Merve Aydogan in Ankara