China held here Tuesday afternoon a state-level anti-terrorist exercise for the 2008 Beijing Olympic Games.

The exercise, dubbed Great Wall No. 4, held in Beijing, focused on security work for the Beijing Olympic Games and tested Chinese police's capacity to handle a hostage-taking incident during the Olympics.

As soon as the combat exercise started, the blue side, acting as terrorists, hijacked more than 20 athletes and confined the hostages in a building.

After the simulated hijacking occurred, the red side, the special police, sealed off the building, scouted the surroundings, and attacked the hijackers.

In the end, the red side successfully rescued the hostages, sources with the Ministry of Public Security (MPS) said.

The red side made an emergency response to the hijacking on-the-spot without prior rehearsal, MPS sources said.

The two sides did not know the tactics of the other side and had to make on-the-spot decisions, according to MPS.

Though a command group was set up to control the exercise, it did not interfere in the actions taken by each side, according to the MPS.

The exercise tested the capacity of Chinese police to handle a large-scale hostage taking and helped improve China's anti-terrorist ability, MPS sources said.

China will do its utmost to guarantee the security of the 2008 Olympics, MPS sources said.