Dutch police ended a major raid on an apartment in The Hague where suspected terrorists had been holed up since early Wednesday, arresting two people.
An ambulance waits outside the terror suspects' house in The Hague
"One suspect was hurt in the shoulder," Wim de Bruin, a spokesman for the state prosecutor's office said as he confirmed the two arrests.
The Dutch ANP news agency earlier reported that the police siege had ended.
Police evacuated five city streets and banned air traffic over the Hague after the suspects hurled a grenade that injured three officers in the pre-dawn raid.
The siege ratcheted up tension in the Netherlands, which has been on high alert since the Nov. 2 murder of Dutch movie director Theo van Gogh.
Dutch filmmaker Theo van Gogh
Van Gogh (photo) was shot and knifed to death by a suspected Islamic radical in Amsterdam after making a movie critical of Islamic treatment of women.
Witnesses said calm around the besieged apartment house returned Wednesday evening. But earlier in the day, scuffles broke out between rowdy supporters of the local ADO Den Haag soccer team and a group of youths of north African descent in the area.
Police believed several terrorist suspects were holed up in the apartment in a working-class district near the central Holland Spoor railway station, which is close to the seat of government and many of the foreign embassies.
"I saw the police walking with two people," a witness, Irma Heijmans, said. "One of them was helped by police officers to get into an ambulance." She added the men were young and acted calmly.
Nederlandse Omroep Stichting TV news said police searched the apartment for explosives with the help of remote-controlled devices.
"I heard shots. There is shooting," Heijmans, a local resident, told NOS TV. "I heard about eight shots and now it's quiet again. The police are watching the building."
Police decline to comment
Police declined to say whether there was any link between Wednesday's raid and the investigation into van Gogh's murder.
"This morning at 2:45 a.m., a special squad of the police made an attempt to arrest suspects in an ongoing terrorism investigation," The Hague prosecutor Han Moraal told reporters. "A grenade was thrown at police and three policemen were wounded."
He said two of the injured police officers were seriously hurt, although their lives were not in danger. He said the suspects fired at the police without causing injuries.
When police sent in a negotiator, one suspect shouted, "I am going to behead you," a resident said.
Dozens of riot squad vehicles and ambulance were parked around the building. ANP news agency reported that ambulances were also on standby in the district.
Hospitals in The Hague were put on alert to free up beds in intensive care units. NOS TV reported that the police had prepared for any possible scenario, the possibility that explosives were stored in the apartment.
Other witnesses told NOS radio that police sharpshooters had taken up positions on nearby rooftops. Nearby residents told ANP news agency they were jolted awake by a huge blast.
"It was like a war movie being played out in front of my house," said Sylvia Cordia, 42.
She told ANP a first blast came from a booby trap attached to a door, then a grenade was thrown before police and suspects exchanged gunfire.
Van Gogh murder sparked violence
The police raid came a week after van Gogh, the 47-year-old filmmaker, was shot and stabbed while cycling near his home in Amsterdam.
Firefighters try to douse the flames at the Bedir Islamic elementary school in Uden, the Netherlands, Tuesday, Nov. 9, 2004. The fire is suspected arson.
The brutal murder shocked traditionally tolerant Dutch society, fueling ethnic tensions and touching off a spate of violence.
Dutch Prime Minister Jan Peter Balkenende on Wednesday warned people "not to get caught up in the mealstrom of violence. A person who uses violence is always wrong ...Let's stand up against extremism together."
Six people, including the alleged killer, have been arrested in connection with Van Gogh's murder and provisionally charged with belonging to a "terrorist conspiracy."
The van Gogh slaying touched off a surge in attacks against Muslim targets in the country. Several mosques and Islamic schools have since been targetted by arsonists and vandals.
Dutch authorities have also stepped up their actions against suspected Islamic radicals.
Van Gogh's suspected killer, Mohammed Bouyeri, who has dual Moroccan and Dutch citizenship, left a letter on van Gogh's body threatening several Dutch politicians and quoting from the Koran, police said. Some 900,000 Muslims out of a total population of 16 million live in the Netherlands.