MOSCOW - The lives of the gunmen holding hundreds of hostages in a Moscow theater will be guaranteed if they release their captives, the head of the Federal Security Service said Friday in the first known Russian counteroffer to the gunmen's demands.

Nikolai Patrushev's statement, made after a meeting with President Vladimir Putin, could represent a significant step forward in the resolving the crisis.

"We are conducting talks and will conduct talks, hoping that they will bring positive results in freeing the hostages," Patrushev was quoted as saying by the Interfax agency.

Details of Patrushev's statement were not immediately available and it was not clear if the guarantee had been transmitted to the approximately 50 gunmen who have held hundreds of hostages in the theater for nearly two days.

The gunmen have demanded that Russia withdraw its troops from the rebel republic of Chechnya.

The statement came on a day of mixed hopes and disappointments in the crisis, with the release Friday afternoon of eight children, but failure to fulfill a reported promise to free all the estimated 75 foreign citizens in the theater.

The children, dressed in winter coats and one of them clutching a teddy bear with aviator goggles, appeared to be in good health as they left the building accompanied by Red Cross workers.

The children, age 6-12, included a Swiss citizen, the ITAR-Tass news agency reported. Officials at the Swiss Embassy in Moscow could not be reached for comment.

"The children were released without any conditions," said Dmitry Rogozin, chairman of the Russian parliament's international affairs committee, who was on the scene as a contact with representatives of foreign governments.

Hopes for a major break in the crisis rose Friday morning with the report that all the foreign hostages would be released, but officials said negotiations broke down and hours passed with no reported progress.

The reason for the breakdown was not specified. Alexander Zharkov, head of the Russian Red Cross, said earlier that copies of the passports of some of the hostages had been given to the gunmen.

The hostages include Americans, Britons, Dutch, Australians, Austrians and Germans, and embassies were requested to send representatives to the scene to meet their freed citizens, Federal Security Service spokesman Sergei Ignatchenko said.

On Thursday, in one of several negotiation efforts, prominent liberal parliament member Irina Khakamada and lawmaker Iosif Kobzon - who is also a singer beloved by Chechens - spoke with the captors and one of them had promised that citizens of countries "not at war with Chechnya" would be released, ITAR-Tass news agency reported.

Seven Russian men and women were released earlier Friday and receiving medical care, but Ignatchenko declined to say why they had been chosen. Officials had expressed hopes that the some 30 children also among the captives would be freed Friday as well.

The count of how many hostages were still in the theater ranged from 600 up to 800, and 39 had earlier been released. The hostage-takers, who number as many as 50, have demanded that Russian forces withdraw from Chechnya, the southern Muslim province that has been mired in war for much of the last decade.

"We are safe and sound, it's warm and we have water and there's nothing else we need in a situation like this," Anna Adrianova, one of the hostages, told Ekho Moskvy radio early Friday. She said the hostages were pleading to Russia's leaders for the situation to be resolved immediately - but without the use of force.

But another hostage said the situation was tense inside the theater, and that conditions were growing worse as the captives hadn't received food or water and been using the theater's orchestra pit as a toilet.

Yelena Malyonkina, spokeswoman for the Nord-Ost musical that was being staged in the theater, said she spoke to a captive official from the production, Anatoly Glazychev, who told her that a bomb was placed in the center of the theater and all the aisles and stage were mined.

"Both the terrorists and hostages are nervous," Glazychev said, according to Malyonkina.

A hot water pipe burst overnight and was flooding the ground floor, Ignatchenko said, but the terrorists called it a "provocation" and no agreement had been reached on sending repairmen into the building.

Still, Ignatchenko said some of the hostages were starting to sympathize with their captors' cause and calling relatives from mobile phones to ask them to stage anti-war demonstrations in Moscow.

A group of about 100 protesters arrived near the theater as dawn broke Friday carrying banners and chanting anti-war slogans, pushing against metal barriers police were using to close off the scene. Several said they were responding to requests to protest in calls from relatives.

Alexander Petrov, a demonstrator who said he had friends inside the theater, admitted that previously he had not been opposed to the Chechen war, but now "whatever way out is there?"

Deputy Interior Minister Vladimir Vasiliyev warned that unauthorized mass actions would not be tolerated.

"You may regard this as a warning to the hotheads who intend to stir up passions. If anything of this kind happens, we will act toughly," he said, according to Interfax.

On Thursday, one young female hostage was shot in the chest, the only known fatality during the siege, supposedly for trying to move around inside the theater after the attackers carried out their raid Wednesday night.

In footage filmed early Friday by Russia's NTV, whose correspondents were allowed to accompany a doctor inside the theater, three male captors - in camouflage and carrying Kalashnikov-style rifles - were seen sitting in what appeared to be a kitchen. Two wore black masks and the other with his face exposed was identified by NTV as the group's leader, Movsar Barayev, nephew of rebel warlord Arbi Barayev, who reportedly died last year.

Two women, part of the gang of hostage-takers, wore robes with Arabic printed on their hoods. Only their eyes were exposed, and they were cradling pistols against their chests. Both appeared to have explosives wrapped in tape around their waists, with the packages wired to a small button they carried in their hands.

The captors made no comments in the footage shown, which also later included a brief clip of a group of six women hostages guarded by one of the female attackers.

Dr. Leonid Roshal, head of the Medical Center for Catastrophes who was with the NTV crew, said the hostages were trying to keep calm and that only two or three were hysterical. He said he had treated the hostages for various minor ailments - including eye trouble, coughing and hypertension - and left behind some medication before emerging from the theater early Friday.

The attackers, some of them women claiming to be widows of ethnic Chechen insurgents, stormed the theater just before the second act of a popular musical Wednesday evening.

President Vladimir Putin said the audacious raid was planned by terrorists based outside Russia, and the Qatar-based satellite TV channel Al-Jazeera broadcast statements allegedly made by some of the hostage-takers.

"I swear by God we are more keen on dying than you are keen on living," a black-clad male said in the broadcast believed to have been recorded Wednesday. "Each one of us is willing to sacrifice himself for the sake of God and the independence of Chechnya."

The hostage-taking occurred just 4.5 kilometers (2.7 miles) from the Kremlin and further undermines claims by Putin and other top Russian officials who insist the situation is under control in Chechnya, where Russian soldiers suffer casualties daily in small skirmishes or mine explosions.

Near the theater, officials set up a center to provide psychological counseling for distraught relatives, who desperately tried to reach family members inside the building on mobile phones. Meanwhile, armored personnel carriers lined the streets, snipers perched on rooftops and troops patrolled the area.

Over the past decade, Chechens or their sympathizers have been involved in a number of bold, often bloody hostage-taking situations in southern Russian provinces, especially in Dagestan.