An Iraqi opposition group on Tuesday afternoon occupied the Iraqi embassy in Berlin, the German police announced.
Two persons were wounded in the embassy occupation, they said.
A group named "Democratic Iraqi Opposition of Germany" has claimed responsibility for the takeover.
In a statement to the press, the group said that "We take over the embassy, which is the fist step in the direction of liberation of our beloved fatherland."
Police said that the highest official at the embassy, Charge d'affaires Shamir Mohammed, was inside when the takeover occurred and several other people were also taken as hostages. During the occupation, two staff members were injured.
According to the police, the embassy has been taken by six "unknown persons."
The incident occurred after a shooting.
According to Iraqi opposition leaders exiled in Germany, the group that initiated the attack is a "desperate splinter organization."
They were likely to be members of the Baath party of Suni origin, said Hans Branscheidt of the Coalition for a Democratic Iraq.
These people have not been part of the negotiations on forming an alliance against Iraqi President Saddam Hussein, he said.
Since 1991, Iraq and Germany have not sent ambassadors to each other's capital.