Rebels holding hundreds of hostages in a Moscow theatre have reportedly threatened to start executing their captives on Saturday morning.

The heavily armed group says it will start shooting people if its demand for a Russian withdrawal from the breakaway republic of Chechnya is not met, a theatre official has said after speaking to captives.

The reported warning came as the Russian authorities offered to spare the lives of the Chechens if they release more than 600 remaining hostages unharmed.

Relatives have staged anti-war protests at the rebels request

A Russian official has said the rebels have released four more captives - all of them Azeris, according to a rebel spokesman who spoke to the BBC.

Earlier on Friday, eight children and seven others were released, but hopes were dashed that the 75 foreign nationals inside the theatre might be freed when negotiations broke down.

Conditions for the captives, who have been held since the guerrillas stormed the theatre in the middle of a sell-out musical on Wednesday night, have worsened.

There are growing concerns about food and sanitation, although the gunmen have allowed a medical team in to visit the sick.

Ready to die

"If the hostages are released, we will guarantee that the hostage-takers' lives are spared," Federal Security Service (FSB) head Nikolai Patrushev was quoted as saying.

"We are carrying out negotiations and will continue to carry them out. We hope that they will bring positive results regarding the release of hostages," he said.

I am amazed this hasn't happened before now - the Chechen war has been both brutal and dubious

Kevin Ripton, Russia Click here to send us your reaction

The offer - the first the Russians have presented to the hostage-takers - was made after a meeting between the FSB and President Vladimir Putin.

But reports from hostages say the guerrillas are giving Russia only 12 hours to meet their demands, before they start shooting the captives.

They have already killed one woman and wounded another as she escaped.

When they took the theatre on Wednesday night, they gave Russia a week to bring an end to the war which is dragging on in the Caucasus republic, or they would blow up themselves, the hostages and the theatre.

The rebels are armed and wearing explosives

The group - including women with explosives strapped around them - is armed with assault-rifles, grenades and pistols.

From the start, they have said they are willing to die for their cause and would set off their explosives is the building was stormed.

The atmosphere inside the theatre is said to be becoming increasingly threatening, with reports that many of the hostages have been tied in their seats and some have had explosives strapped on to them.

Food is reportedly running low and sanitation is becoming of increasing concern.

Children released

Eight children, looking tired and frightened, were led from the theatre on Friday afternoon by members of the International Committee of the Red Cross who had held negotiations with the rebels inside the building.

The building is surrounded by elite troops

Despite hopes that the release of the children - aged between seven and 13 - could pave the way for the freeing of foreigners, there has been no apparent progress.

Two deadlines for the release of the foreign hostages have passed and there is now said to be no schedule for their release.

The British ambassador in Moscow has visited the theatre but came back empty handed. Experts have been sent from London to help negotiate.

The foreign nationals include Americans, Britons, Germans, Dutch, Australians and Ukrainians.

Relatives of foreign hostages who have spoken to their loved ones, say the rebels want their cause to be as widely publicised as possible, in order to bring international pressure to bear on the Russian Government.

About 200 hostages were freed in the hours after the guerrillas invaded the theatre.