New Zealanders are being warned that there is "some risk" to their security in Papua New Guinea due to growing political unrest.
The Ministry of Foreign Affairs and Trade (MFAT) today advised New Zealanders to limit travel around Port Moresby after soldiers loyal to ousted prime minister Sir Michael Somare raided barracks in the capital.
A spokesman for MFAT said the ministry had updated its travel advice as political tensions may increase over the next few months with elections scheduled in June.
"New Zealanders are advised to avoid large gathering due to the potential for violence, to monitor local events closely and to maintain a high degree of security awareness," he said.
The New Zealand High Commission - which is right next door to Parliament - was monitoring developments.
"It is important that this situation is resolved as soon as possible and Prime Minister [Peter] O'Neill has said that the authorities are taking steps to manage the situation," the spokesman said.
Foreign Affairs Minister Murray McCully was unavailable to comment as he is in Ethiopia.
Labour's foreign affairs spokesman Phil Goff said if reports of a possible coup were true, New Zealand needed to urgently work with its Pacific neighbours and Papua New Guinea to "uphold the country's constitution".
"Papua New Guinea has significant problems to work through in its internal political system and the social and economic challenges it faces.
"Intervention by military force provides no solutions."
Goff said having soldiers seize power takes away democratic rights and opens up the prospect of abuse of power and lack of accountability.
"The army has no skills to address social and economic challenges and in almost every case around the world has failed to do so when they take control."
It was understood 12 to 20 rebel troops stormed Taurama Barracks in the early morning, before moving to the headquarters of the defence forces, Murray Barracks.
The soldiers confined Francis Agwi, the commander of the country's Defence Force and another senior officer to their homes at Murray Barracks overnight.
They replaced the chief commander in what could be a ploy to help Somare return to power, local media reported. Retired Colonel Yaura Sasa was now claiming to be in charge of the military.
He has called on the governor general to reinstate Somare as prime minister and has given the nation's politicians seven days to decide who is in charge of the country.
"My task is restoring the integrity and respect of the constitution and the judiciary,'' Sasa said, from the commander's office in Port Moresby's Murray barracks.
"I am now calling on the head of state (Governor General Sir Michael Ogio) to immediately implement Sir Michael's post as prime minister.''
He said O'Neill must recall parliament and give the nation's 109 members of parliament a seven-day deadline to "sort out'' the constitutional mess.
There were no immediate reports of violence at the barracks or in the streets of Port Moresby.
"I can confirm that there is a mutiny," the deputy editor of the Post-Courier newspaper, Peter Korugl, told Reuters. Members of the First Pacific Islands Regiment were behind the action, he added.
Australia appeared to confirm the move against Brigadier General Agwi and called for a restoration in the line of command in Papua New Guinea's defence forces.
"We urge that the situation be resolved as soon as possible, and that the Papua New Guinea Defence Force chain of command is restored," the foreign ministry said in a statement.
It added, however, that an Australian diplomat had even spoken to Agwi since his seizure, lending weight to reports that Papua New Guinea authorities were trying to calm the situation.
Australians in the city were also told to limit their travel and exercise a high degree of caution.
The initial, sketchy reports followed weeks of political instability, with Somare challenging the legitimacy of O'Neill's government.
Somare was replaced by O'Neill last August after his seat was declared vacant while he received medical treatment in Singapore.
The Supreme Court last month ordered Somare's reinstatement but parliament rejected that. Last week, he tried to enter parliament waving a court order but O'Neill threatened him with arrest.
Frank Kolma, the editor in chief of The National newspaper in Papua New Guinea, said the rebels were using the phrase "Operation Protect the Constitution".
Kolma, who drove past Murray Barracks earlier on Thursday, said that although the city was calm, a large number of cars were parked outside the barracks and few people appeared to be going in or out.
There was no obvious display of firearms, he said.
"We hear that the commander has been asked not to leave his house. He is virtually under house arrest at Murray Barracks in the centre of Port Moresby," Kolma told Reuters.
The ABC also speculated whether the mutiny could instead be related to unhappiness within the ranks over pay and conditions following cutbacks to defence spending. It noted that some soldiers had been planning to stage a protest in coming days.
"At this stage it is not clear if the incident is related to the conflict between Peter O'Neill and Sir Michael Somare over the country's prime ministership, or if it is the work of disgruntled soldiers," ABC said on its website.
Last month, O'Neill declared victory in the standoff after the governor general named him the legitimate head of government. The country's civil service, police and army leaders also backed O'Neill, though the ABC speculated that some sections of the army could still be supportive of Somare.
For many Papua New Guineans, the crisis is a contest between the old political guard of Somare - known as "The Chief" who led the country to independence - and O'Neill's administration, which is seen offering a fresh, more open alternative.
Fairfax NZ, with Reuters and AAP