A number of people were being held hostage at a supermarket in Mthatha on Tuesday afternoon, Eastern Cape police said.
Superintendent Mzukisi Fatyela said police believed two armed men, part of a gang that robbed the store at about 1pm, were holding staff at gunpoint by 4pm.
It was not known how many people were inside the Boxer Supermarket in Callaway Street.
Fatyela said a pregnant woman, who was in the same building but not inside the supermarket, was taken to hospital where she would be treated for trauma.
Police were setting up lights as it was getting dark, he said.
An eyewitness said the robbers were believed to be holding about eight staff members and an unknown number of customers hostage.
He said nearly 500 onlookers, including school children, had gathered outside the shop.
Hostage negotiators had entered the premises accompanied by a number of armed police. A large police contingent surrounded the scene and emergency workers were also present.
Superintendent Mzukisi Fatyela said a group of about six armed men had robbed the supermarket earlier.
Police officers patrolling the area were alerted about the incident. Four robbers fled in a VW Jetta and police gave chase.
One robber was shot dead and another was arrested a few kilometres from the scene. Two ran away.
Police recovered the getaway car, and confiscated two R5 rifles and one pistol. No money was recovered.
Fatyela said police believed the hostage-takers were left behind when the other robbers fled the scene.
Police were continuing to negotiate with the hostage takers, Fatyela said. — Sapa