What happened in Masaya?
Masaya has been at the centre of the anti-government demonstrations since they first erupted three months ago.
The city, which is 30km (19 miles) south of the capital, Managua, was once a stronghold of the governing Sandinista party but has now become a symbol of resistance to the powerful party and its leader, President Ortega.
Protesters demanding his resignation barricaded roads leading into the city and inside the city itself.
Over the past days, a government "clean-up" operation aimed at removing the blockades and "restoring order" reached Masaya. With hundreds of armed men loyal to the government moving into the city, it quickly descended into a deadly stand-off.
The announcement comes after forces loyal to President Daniel Ortega violently clashed with activists in the Monimbó neighbourhood on Tuesday. Residents described coming "under siege" from police and paramilitaries. Human rights groups say the number of people killed in three months of anti-government protests now exceeds 300.
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