Miroslav Blazhev, 33, hijacked a bus, heading to the Black Sea resort of Varna, approximately an hour after it departed from the capital Sofia earlier on Tuesday. The bus had 36 passengers, two drivers and a bus attendant onboard.
"The bus is currently stopped at a bus station in the village of Sopot, the Lovech municipality," the agency said citing an interior ministry spokesman. "Firetrucks and police cruisers are at the scene, while a team of psychologists are on their way to the location."
The man, armed with a gun, ordered the driver to stop at a bus station in the Lovech municipality some 125 km (78 miles) east of the capital. He claimed that he had an explosive device in his luggage and demanded a news conference.
"The hijacker wasn't nervous and his behavior was comparatively calm and even polite to the passengers," the Focus News agency said citing one of the hostages.
Blazhev also said he would release hostages after meeting a man named Petar Ganev, who allegedly was responsible for a traffic accident in August 2008 in which his pregnant girlfriend lost her baby.
A reporter with the local TV station, BTW, who talked to the hijacker, said the man was "mentally unstable."
"I asked him whether his wife had been injured in that accident, and said "no". He told me himself that she was hit by the side-view mirror of the car," Mirolyuba Benatova told the Darik radio station.
She added that the woman gave birth to a healthy baby girl this January.
According to latest media reports the hijacker was been detained and taken to a district police department. Police found no explosives in the luggage compartment of the bus.