Austria holds man with explosives near US embassy

(Adds Islamic community statement, paragraph 10)

VIENNA, Oct 1 (Reuters) - Austrian police arrested a Bosnian man on Monday after he tried to enter the U.S. embassy in Vienna carrying an explosives-filled rucksack, a spokeswoman said.

The man ran away from the embassy after his rucksack triggered metal detectors at the entrance. He dropped the bag in the next street and was arrested soon after, police spokeswoman Doris Edelbacher said. There were no injuries.

Bomb squad specialists found two devices similar to hand grenades and other explosive material in the pack, as well as nails and a book that had "some reference to Islam", she said.

"Had it detonated, it would have had an enormous shrapnel effect," Edelbacher added. However, it remained unclear if the explosives could have been quickly detonated by the man.

Police later carried out a controlled explosion to make the rucksack safe.

The man, a 42-year-old resident of Lower Austria province near Vienna, was being questioned. "He appears to be a bit confused," Edelbacher said, adding that there were no initial indications he had an Islamist background.

The U.S. embassy said the explosives in the rucksack showed up on a monitor during security control and when guards quickly barred the entrance, the man grabbed the rucksack and fled.

Embassy guards alerted police and chased the man down the street from the embassy. About one block from the embassy, he dropped the rucksack and was seized by police moments later, the embassy said in a statement.

In Sarajevo, a Bosnian foreign ministry spokeswoman said they had no immediate information on the incident.

Austria's Islamic community denounced the incident. "We condemn this attempted terror attack and reject any Islamic fundamentalism or radicalism. Any suspicious activity should be reported immediately to security authorities," community official Guenther Ahmed Rusznak said in a statement.

It was the second such scare in Austria within weeks.

Last month, police arrested three people on suspicion of links to al Qaeda and having posted an Islamist video on the Internet in which they threatened Germany and Austria. One of the three was later released without charge.

Police said they had found no evidence that an attack was in the offing. All three people were second-generation immigrants from Arab countries and held Austrian passports.

additional reporting by Maja Zuvela in Sarajevo