More than 100 children and six teachers have been taken hostage in a primary school in northern Holland.
The Dutch Prime Minister, Joop den Uyl, said the hostage-takers - who are from the South Molucca islands (formerly part of the Dutch East Indies) - had still not made any demands.
But he said they would probably want the release of 20 Moluccans imprisoned in 1975 for hijacking a train not far from the current sieges and raiding the Indonesian consulate in Amsterdam.
This second generation of Moluccans are campaigning for the Dutch government to press for an independent state for their people in Indonesia, even though most of them have never set foot in their homeland.
Their parents, many of whom fought on the side of the ruling Dutch during Indonesia's war of independence between 1945 and 1949, left Indonesia for fear of reprisals.
They hoped to return but were gradually integrated into Dutch society.
There are now some 40,000 South Moluccans living in the Netherlands. Many refuse to take on Dutch citizenship and tensions between the communities are at an all-time high.
The gunmen took over the school in the village of Bovensmilde at around 0900 local time. They released 15 South Moluccan children, gathered the rest in two classrooms and covered the windows with newspapers.
Police and troops moved into the area and worried parents are waiting outside. The gunmen have accepted blankets and some food for their hostages.
At one point a mentally handicapped women ran into the school grounds. At the insistence of the hostage takers police had to undress to escort her off the premises to show they were unarmed.
Seven other South Moluccans seized a train at the same time with about 50 passengers on board in open countryside near the city of Groningen.
The Rotterdam-Groningen express was brought to an abrupt halt when a young Moluccan girl pulled the emergency cord just before it reached its destination. Five heavily armed men then boarded the train from surrounding fields, released children and the elderly and separated women and men.
They have been given a telephone to negotiate with the government.
Mr Den Uyl indicated the government would take a hard line on any demands made to them. "Patience is the watchword but we are prepared to use controlled violence if necessary," he said.