France has been on high alert after a series of jihadist attacks in the past three years, most recently a Saturday night knife attack by a man in Paris last month in which one person was killed.
An armed police officer and a sniffer dog search the area.
The man also claims to have an accomplice outside the building.
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The man is being investigated on multiple counts, including kidnapping and sequestration, attempted homicide and violence with a weapon, the official said.
Police officers of the BRI intervention squad prepare a shield on June 12, 2018 near the site of an ongoing hostage taking in central Paris.
Before the arrest, police and firefighters sent a water-spraying robot into the building, Le Parisien newspaper reported.
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Gerard Collomb tweeted the news ending Tuesday's drama in a ground-floor office in a crowded neighborhood of the French capital.
At least one other man was lightly injured while fighting with the hostage-taker and escaping before police arrived on the scene. However, a motive for the demand was not established.
The man has asked to be put in contact with the Iranian embassy.
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