"There are about a hundred police officers outside the building. Talks are being held with the terrorists to make them surrender," the source said.
He remarked that the dwellers were evacuated early in the morning, with gas supply of the building cut off for reasons of safety.
The exact number of militants is unknown. There may be three of them, the source said.
Meanwhile, armored vehicles have been drawn to the besieged building.
The armed men are on the second floor of the five-storied building. During a special joint operation conducted earlier officers of the republic's Interior Ministry and Federal Security Service arrested three members of an illegal armed formation, who were on the wanted list on suspicion of perpetrating terror acts in Russia. They had arms, including grenades, and literature of extremist content on them. The rest of the group barricaded themselves into the apartment building on Shogentsukov Avenue, head of the republic's Interior Ministry's press service Marina Kyasova reported.
No hostages have been taken, she was cited as saying.
"It is early to speak about whether some or another extremist organization, including the jamaat Yarmuk, is responsible for the sally," the source in the republic's Interior Ministry noted.
A similar situation occurred in Nalchik in late January, when seven militants of the extremist group Yarmuk were destroyed.
