The train from Madrid's southern Vallecas district was evacuated some 400 metres (440 yards) before entering Atocha station after a man carrying a backpack threatened to blow up the train.
The busy central station was also evacuated after the incident but reopened late in the morning on Friday.
.@policia desaloja el tren proveniente de vallecas antes de entrar en Atocha. pic.twitter.com/pYZrQE1s0t
— Javi Carmona (@JaviKarmona) January 2, 2015
The man — reportedly from North Africa — was arrested with police confirming he was not carrying explosives.
Catalan daily La Vanguardia reported his backpack contained only a bottle of water.
Tras comprobar en Atocha una FALSA amenaza de bomba, seguimos las pertinentes labores de seguridad. Después se reanudará el servicio de tren
— Policía Nacional (@policia) January 2, 2015
Spain's interior minister Jorge Fernández Díaz said the man was undergoing psychiatric treatment and had spent a week in a Madrid clinic in December.
On March 11th 2004, Al-Qaeda-inspired bombers blew up four packed commuter trains in Madrid, killing 191 people. Around 2,000 people were injured in the attacks.
Friday's false alarm comes a week after a man rammed a car loaded with gas bottles into the headquarters of Spain's ruling Popular Party in Madrid.
He claimed he was carrying 15 kilograms of the explosive ammonal — a mixture of ammonium nitrate and aluminium powder — and a number of timers.
However, initial analysis showed that while a substance found in the car was flammable, it wasn't an explosive.
Nobody was hurt in the attack.
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