BAGHDAD -- Insurgents seized control of a church in central Baghdad on Sunday, taking hostages during evening mass after attacking a checkpoint at the Baghdad Stock Exchange.

The hostages were freed after a four-hour long standoff at Our Lady of Salvation Catholic Church, but two Iraqi security forces were killed and at least four wounded in the stock exchange attack, Iraqi officials said.

Officials said the attack began with a grenade tossed at the checkpoint at the stock exchange after it had closed for the day. After exchanging fire with security forces, the gunmen apparently fled into the nearby church in the Karrada, where worshipers were celebrating evening Sunday mass.

``It is an armed attack on the Our Lady of Salvation church. Three explosions occurred and our forces are surrounding the area,'' Major-General Qassim al Moussawi, a spokesman for the Baghdad operations command, told Iraqi media.

An Iraqi television station, al Baghdadiya, said the suspected gunmen told them in a phone call that they were from the Islamic State of Iraq -- an al Qaeda affiliated group. It said the attackers were demanding the release of al Qaeda prisoners being held in Iraq and Egypt.

The hostages were freed by Iraqi counter-terrorism forces and police. A U.S. military spokesman said that the United States provided only aerial surveillance, but witnesses said they saw U.S. soldiers on the scene.

It was not immediately clear whether the gunmen were killed in the operation.

The Vatican has said it is deeply concerned over the fate of Iraq's dwindling Christian minority. They are believed to number less than 5 percent of Iraq's population, with tens of thousands of families having fled violence and attacks against churches.