Russia says it has arrested eight people suspected of hijacking a missing ship near the Cape Verde islands in the Atlantic Ocean, whose disappearance baffled maritime authorities for more than two weeks.

Nationals from Estonia, Russia and Latvia were among those detained by authorities,  Anatoly Serdyukov, Russia's defence minister, said on Tuesday.

"These people ... boarded the Artic Sea and, using the threat of arms, demanded that the crew follow all of their orders without condition," news agencies quoted Serdyukov as telling Dmitry Medvedev, Russia's president.

The arrests come a day after Russia's navy found the missing vessel with the crew "alive and well".

Serdyukov said the crew was rescued without a shot being fired.

He said the Arctic Sea merchant ship was hijacked in Swedish territorial waters in the Baltic Sea.

The Arctic Sea vanished while sailing from Finland to the Algerian port of Bejaia, where it was due to have docked on August 4 with a $1.3m load of timber.

Earlier, relatives of the crew appealed to Vladimir Putin, Russia's prime minister, for a criminal investigation into the affair.

The Kremlin ordered Russian warships to join the hunt for the 4,000-tonne, 98-metre bulk carrier after it went missing in the English Channel.