Gunmen on Russia Copter Free 7 Hostages : Kidnaping: They still hold seven others, including four boys. The hijackers are given $10 million in cash.

Four masked gunmen holed up in a military helicopter packed with explosives freed seven children and their teacher Friday but apparently held on to seven other hostages.

The release of five girls, two boys and the teacher came after the gunmen were given $10 million in cash they demanded on the second day of a drama that began when the men raided a school about 275 miles northwest of here. They had threatened to kill hostages if they did not get the money, Russian Television reported.

The hijackers said they intended to fly to Baku, capital of neighboring Azerbaijan, and then release the other hostages before proceeding to Iran, said Vladimir Shcherbakov, a duty officer at the Mineralnyye Vody police department.

It was not clear why the gunmen wanted to go to Iran. The news agency Itar-Tass said they were “Caucasians,” people from the Caucasus Mountains region consisting of southern Russia, Armenia, Georgia and Azerbaijan.

Russian Television said it appeared the gunmen were still holding four students, all of them boys, a bus driver and two volunteer pilots on the helicopter.

The gunmen were provided the MI-8 helicopter after kidnaping the children and teacher in Rostov-on-Don on Thursday, and they flew overnight to Mineralnyye Vody, a mineral springs resort about 820 miles southeast of Moscow.

Before some of the hostages were released Friday, the hijackers allowed authorities to send blankets and hot food to warm the children on an overcast winter day. The released girls smiled, but their teacher looked haggard in a report on Russian Television.

At about midnight Friday, the hijackers demanded that the helicopter be refueled and a weather forecast provided in the direction of Makhachkala, a southern Russian city on the Caspian Sea, and Baku, Itar-Tass said, adding, “In all probability, they plan to leave Mineralnyye Vody within . . . hours.”

It said the air pirates gave “an ultimatum” that no escort or tracking planes be in the air after their helicopter takes off.

Negotiations continued Friday night and the situation was described as tense.

“Actions by the terrorists are getting unpredictable.” said First Deputy Prime Minister Oleg N. Soskovets.

The Russian government agreed to pay the $10 million. A security officer delivered the money in five plastic-sealed blocks of $2 million each from Moscow to Mineralnyye Vody airport Friday afternoon.

Viktor V. Gerashchenko, chairman of the Russian Central Bank, told reporters in Moscow that it was not easy to gather so much foreign cash on short notice. Some of the money was borrowed from private banks, he said.

“The country’s leadership quite correctly considers human life to be its top priority. There is nothing more valuable than life, especially the lives of innocent children,” he said.

Commandos of the former KGB’s elite Alpha unit and other soldiers arrived at the airport Friday. But there was no sign of a rescue attempt.

Earlier Friday, the gunmen ordered the helicopter to take off, then landed an hour later after circling Mineralnyye Vody.

Russian Television said they were forced to turn back by helicopters carrying commandos, but Security Ministry spokesman Alexei Kandaurov said bad weather kept the aircraft from heading toward Iran.

Itar-Tass quoted some children who were released Thursday as saying the hostage-takers wanted treatment for syphilis. A conflicting report said the gunmen warned that they were infected with AIDS and had nothing to lose.