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The men took about 70 people hostage but later released 30 of them, Information Minister Khieu Kanharith said. Three of the hostages were teachers, Deputy Military Police Commander Prak Chanthoeum said.
The attackers "were armed with shotguns" and stormed the Siem Reap International School about 9:30 a.m., demanding $1,000, six AK-47 assault rifles, six shotguns, B-40 grenade launchers, hand grenades and a car, Prak Chanthoeun said. The information minister said that the hostage-takers wanted a 12-seat minivan.
Authorities were communicating with the hostage-takers by mobile phone, the deputy military police commander said.
Foreign students also appeared to be among the hostages, Siem Reap police official Ou Em said.
Siem Reap, 140 miles northwest of the capital Phnom Penh,
The ancient temples of Angkor, one of the world's man-made wonders, are located just outside the town which has mushroomed in recent years thanks to the tourism boom.
Khieu Kanharith said he was puzzled by the small amount of cash demanded and speculated whether the hostage takers were "rogue elements" hired to hurt tourism in Siem Reap.
"We wonder if they are elements of the CFF (Cambodian Freedom Fighters) or are hired by some company or country to destroy tourism in Cambodia. We don't know since they are covering their faces with masks," he said, adding: "Where do they want to run to with AK-47s and B-40 rockets?"
The CFF is an anti-government group that launched a failed armed attack in Cambodia November 2000.
Its leader, Cambodian-born US citizen Chhun Yasith, was arrested early this month in California. He was charged with engaging in a military expedition against a nation with whom the United States is at peace and other offences.