The little-known group said the action was to press for the overthrow of the Iraqi leader, Saddam Hussein.

The Iraqi ambassador is believed to be among the half dozen or so people being held.

"In the name of the Iraqi people and their legitimate leadership, the Iraqi opposition, we declare that the liberation of Iraqi soil begins today "

- Democratic Iraqi Opposition of Germany


Two embassy staff are reported to have been slightly injured when the attackers entered the embassy.

The main Iraqi opposition organisations say they know nothing about the dissident group, which calls itself the Democratic Iraqi Opposition of Germany.

The incident comes two days after German Chancellor Gerhard Schroeder renewed his opposition to a possible US war against Iraq - a stance which has been met with criticism from Washington.

Condemnation

In a statement, the Democratic Iraqi Opposition of Germany said it had launched a "peaceful and temporary" action.

"In the name of the Iraqi people and their legitimate leadership, the Iraqi opposition, we declare that the liberation of Iraqi soil begins today," the group's statement, faxed to Reuters, said.

"We are taking over the Iraqi embassy in Berlin and with this the first step in the liberation of our beloved fatherland".
Police say they are not allowed to enter the building


The area has been sealed off and armed police in bullet proof vests have been deployed.

Police were alerted by an emergency call from local residents, a spokesman told the Associated Press.

The Iraqi National Congress (INC), the country's main opposition group in exile, condemned the occupation by what it said was an obscure organisation not representing the opposition.

"We confine our war of liberation to Iraq proper," an INC spokesman in London said.

"We are trying to get more information on these people. We do not condone such violence," the spokesman said.

The INC says the Iraqi Democratic Opposition of Germany is a new group, founded in the past few months.