At least 17 men and women, some wearing explosive belts, entered the school in Beslan, North Ossetia, officials said.
They are believed to have laid mines and trip wires, threatening to blow up the school if stormed by police.
According to Russia’s Itar-Tass news agency they are demanding the withdrawal of troops from Chechnya
The incident comes amid heightened security in Russia after a suspected suicide bomb attack in Moscow and the bombing of two passenger planes last week.
Russian President Vladimir Putin broke off a working holiday on the Black Sea to return to Moscow following the school siege.
It was not immediately clear who the gunmen are, but correspondents say suspicion will fall on Chechen rebels.
