A massive manhunt involving a police helicopter and the dog unit was launched and a suspect was arrested at an informal settlement 5km from the scene.

The tourists - from Sweden and the US - had been hiking and taking pictures at the picturesque Hole-in-the-Wall when three men in hoods accosted them at gunpoint.

The three robbers demanded all their valuables but, according to locals, a 60-year-old American woman refused to hand over her handbag.

A robber put a gun to her head but she still refused to part with her valuables. The man then fired two shots into the air and the terrified woman immediately handed the bag over.

No one was injured. Swede Richard Ohlsson, a medical student, said: "We were having a good time and being robbed was the last thing on our minds."

The robbers took his bag, which contained money, his passport and iPod.

The general manager of the Hole-in-the-Wall holiday resort, Gerhardt Mynhardt, said he heard about the hold-up when he spotted a young tour guide running from the forest.

Using his binoculars, Mynhardt spotted the three gunmen crossing the Mpako River. They were carrying the handbags and backpacks they had stolen from the tourists.

A police helicopter was immediately summoned from King William's Town to assist in the search.

Eastern Cape police spokes-man Lieutenant-Colonel Sibongile Soci confirmed the arrest of a 20-year-old man.

"He was in possession of an unlicensed 9mm firearm, a camera and clothing that belonged to the victims," she said.

The tourists left Hole-in-the-Wall yesterday. Ohlsson said "crime happens everywhere" but he was "not sure" if he would return to the province. The robbery has angered the community.