Unidentified gunmen seized a busload of students and teachers near Manila's city hall while on the run after a holdup Wednesday, police said.
Hostage-takers scribbled on a piece of paper, visible through the bus window, that they were holding 32 children and two teachers and were armed with two grenades, an Uzi assault rifle police and a .45-caliber pistol, officer Mark Andal said.
They said they were demanding housing and education for 145 children in a day-care center.
Police surrounded the bus. TV footage showed the young children, one in sunglasses, waving from the windows, and a woman could be seen making a hand signal asking for a phone as one of the gunmen held a grenade at her side.
"They are hold-uppers being chased by our policemen," Manila police chief Reynaldo Varilla told DZMM radio, adding that two men were believed to be involved. "They saw a bus loaded with pupils.
"Right now negotiations are ongoing. We hope we can have them surrender peacefully so no one will be hurt."