Heavily armed police are surrounding a nightclub in a rural Dutch town southeast of Amsterdam after reports that a gunman is holding several people hostage.

The hostages were being held in Cafe Petticoat, a popular bar and nightclub in Ede, according to an AP videographer at the scene.

A party was held at the establishment last night and was scheduled to finish at 4am this morning, according to a post on Facebook.

Images from the scene in Ede, a rural market town 53 miles southeast of Amsterdam, showed police and firefighters on the streets.

Earlier Saturday, officers cordoned off a square in central Ede and evacuated about 150 nearby homes.

Details about the suspect are unclear but reports have suggested they entered the club armed with explosives and other weapons.

Saved 32% of original text.