A gunman who was holding hostages in a bank in the French city of Toulouse has been arrested by police after a tense all-day siege.

The man, who claimed to be an al-Qaeda operative, is believed to have been injured but his four hostages were unharmed.

A police source said the man's name was Boumaza but that has not been confirmed.

He was captured after a special police unit, the Groupe d'intervention de la police nationale (GIPN), stormed the bank. There were reports of three loud bangs in the area.

The gunman had earlier released two of his hostages, both women.

He walked into the branch of the CIC bank just after 10am local time and demanded money from the cashier. He took the hostages when his demand was refused.

Public prosecutor Michel Valet said he claimed that he was "not acting for money, but for religious reasons".

A senior police officer said, however, that the incident was a simple attempted bank robbery that had gone wrong.

Other sources told the Le Parisien news website that the gunman was schizophrenic and had stopped his treatment.

The report said that police investigators were not convinced by his claims that he had links with al-Qaeda.

It also quoted his sister, who managed to contact him on his mobile during the stand-off with the police, saying he was not very religious.