The Gabonese soldiers staging the coup announced the establishment of a "restoration council" via the national radio station after it was taken over by soldiers.
Diplomats in Gabon said tanks and armed vehicles "can be seen on the streets of the capital Libreville". No violence has been reported. He has been in Morocco since November to continue treatment.
Obiang read a speech, condemning President Ali Bongo's new year speech.
According to media reports, soldiers say they were disappointed by the message, calling it "a pitiful sight" and a "relentless attempt to cling onto power".This is a developing story and will be updated as more details emerge. A spokesman for the presidency said he would make a statement shortly.
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He criticised "the high military hierarchy" for failing to defend "the best interest of the nation" by tolerating the president's lies about his health, referring to a New Year's speech made in Morocco in which he claimed he was well. His family has ruled the oil-rich Central African nation for almost half a century.
Bongo won re-election in 2016 by fewer than 6,000 votes, sparking deadly clashes between protesters and police during which the parliament was torched.
The ailing leader is now in Morocco recovering from a stroke suffered in October, apparently leaving space for the military to take power.
Local news described the event as an "attempted coup d'etat" and said the Gabon Republican Guard was seizing power.