There are reports Turkey's top general, General Hulusi Akar, is among those taken hostage at the military HQ.
Mr Yildirim told NTV by telephone: "There was an illegal act by a group within the military that was acting out of the chain of military command. Our people should know that we will not allow any activity that would harm democracy."
Traffic has been stopped from crossing both the Bosphorus and Fatih Sultan Mehmet bridges in Istanbul.
There are reports of gunshots and at least one loud explosion in the capital Ankara. Other reports said soldiers were inside buildings of the Turkish state broadcaster in Ankara.
Gunfire was also heard outside Istanbul police HQ and tanks are said to be stationed outside Istanbul airport. All flights are cancelled, reports say.
One European Union source told Reuters that the military action "looks like a relatively well-orchestrated coup by a substantial body of the military, not just a few colonels".
Visiting Moscow, US Secretary of State John Kerry said he hoped for peace and "continuity" in Turkey.
British Foreign Secretary Boris Johnson said he was "very concerned" by events.
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