EU and UN demand army release detained president and prime minister as warning shots reportedly fired in capital.
Burkina coup leader tells French TV has no contact with ex-leader Mr Compaore.
"I have had no contact with him, before or after," said Gen Diendere in response to a question on whether Mr Compaore was involved in the coup, adding he had the full support of the army.
"All change of this type can lead to violence. I am conscious of that everything will be done to avoid violence that could plunge the country into chaos," Gen Diendere said.
One person has been killed and 60 people have been hurt in the coup violence, according to medics.
Earlier today soldiers fired warning shots at a crowd in central Independence Square of the capital Ouagadougou. Soldiers were driving down streets beating and detaining protesters.
Soldiers in the capital, Ouagadougou, fired warning shots to disperse a crowd of protesters gathered in Independence Square.
Sporadic gunfire continued to ring out from other areas of the capital.
Interim President of Burkina Faso Michel Kafando (R) and Prime Minister Lt. Col. Isaac Zida
Burkina Faso was due to hold elections on October 11 that many hoped would strengthen democracy. The transitional government came to power after the president of 27 years, Blaise Compaore, was ousted late last year in a public uprising.
General Gilbert Diendere, who for three decades served as Compaore's chief military adviser and operated an intelligence network spanning West Africa, was named as the head of a military junta called the National Council for Democracy.
What caused the coup may have been a proposal earlier this week to dissolve the old presidential guard that was loyal to Mr Compaore.
The guard has remained more or less intact even though Mr Compaore went into exile last year, and apparently fears the loss of their privileges. As members of the old regime, they are also banned from participating in the elections that were due to take place in October.
This shows how difficult it is to move to a lasting and fair democracy after you have had an authoritarian regime that was in power for so many years.
Compaore was in for power for 27 years, and even though he won elections in more recent times, what has happened today shows how difficult it is for democracy to take place after that kind of rule. It leaves a lot of people from the old regime who fear for their positions and prospects if democracy takes hold, and that seems to be what is going on here.
Is the guard working with Compaore's blessing? It was unclear at present whether the presidential guard was acting with Mr Compaore's blessing, or was acting entirely independently. But he said anyone who tried to subvert democracy in the country would come under huge regional pressure.
Quite apart from internal protests against the coup, which seem to have united most of Burkina Faso's politicians, nearly all Burkina Faso's neighbours in West Africa these days are democracies now and are signed up to basic democratic principles. The region is completely different to how it was in the 1970s or 1980s, when strongmen could more or less do as they liked.
Burkina Faso is also landlocked and very dependent on its neighbours. Those neighbours could even impose banking restrictions as Burkina Faso is part of the CFA currency region. If the soldiers try to hang onto power it could get very difficult for them.
French president Francois Hollande has said he sees no reason why the country would intervene in the coup despite his condemnation.
There are currently 220 French troops in the capital Ouagadougou as part of a regional force fighting extremists in west Africa.
France has friendly relations with Burkina Faso and we cannot just allow what is happening today, he added.
We have no reason to intervene, he said as France told its nationals to remain at home.
The interim president and prime minister arrested are in good health and will be released, General Gilbert Diendere said.
The general said the coup was launched because of the country's serious pre-election security situation. Elections were due to be held next month.
This military coup comes almost a year after a popular uprising in Burkina Faso ousted its long term president, Blaise Compaore.
Mr Compaore was aged just 36 when he took power in Burkina Faso, a landlocked French colony previously known as Upper Volta, and whose present title translates roughly as Nation of Incorruptibles.
He allegedly received training in the 1980s at the late Col Muammar Gaddafi's "World Revolutionary Centre", a school once described as the "Harvard and Yale of a whole generation of African revolutionaries." Among his fellow students were the Liberian warlords Charles Taylor, now serving 50 years in a British jail for war crimes, and Taylor's late ally Foday Sankoh, who led Sierra Leone's notorious Revolutionary United Front.
In 2000, Mr Compaore was accused by a British diplomat, Stephen Pattison, of sending mercenaries to fight alongside rebels in Sierra Leone against United Nations peacekeepers, in exchange for diamonds. Two years later, he was accused of funding rebels in the northern Ivory Coast.
He always denied the claims, however, and in more recent years, managed to re-invent himself as a regional mediator, acting as a broker in the peace talks during the conflict in Mali in 2012-13, where the north of the country was overrun by Ansar Dine, a Tuareg rebel movement briefly allied with al-Qaeda in the Islamic Maghreb (AQIM).
Ansar Dine representatives were invited for peace talks in the Burkinabe capital, Ougadougou, while Mr Compaore also offered his services in negotiations to free several Europeans held hostage by AQIM.
While his reputation as a mediator may not be that of Nelson Mandela or Kofi Annan, he proved as good as his word, despatching envoy to drive hundreds of miles across the Sahara's most remote and lawless stretches to hold talks with kidnap gangs on several occasions.
While there was often speculation that a prisoner releases or large ransom ultimately cemented the deals, the envoy could easily have been killed or kidnapped himself had Mr Compaore's contacts with AQIM been anything less than solid.
Blaise Compaore, the former president, had wanted extend his 27-year rule last year as he was coming to the end of his second five-year term.
Despite constitutional limits introduced in 2005, the country's legislature was going to assess a proposed amendment that would allow Mr Compaore to run for re-election in the following month.
He would have been in power for another five years but the opposition feared that it would mean that he stayed in power for longer seeking re-election more than once.
The former president was 36 when he seized power in a 1987 coup after Thomas Sankara, his former friend, was removed from power and assassinated.
On October 31, he resigned as president and fled to Cote d'Ivoire with his family. Amnesty's report from January this year says the family then went to Morocco before returning to Cote d'Ivoire in mid-December last year.
General Gilbert Diendere, Mr Compaore's former chief-of-staff, has been appointed head of a new ruling authority set up today after the country's presidential guard declared a coup.
He will lead the National Council for Democracy, it said in a statement.
A curfew is in place across the country from 7pm (8pm BST) until 6am tomorrow and land and air borders have been closed.
Francois Hollande, the French president, has condemned the coup and called for the immediate release of those arrested.
The president firmly condemns the coup d'Etat that has taken place in Burkina Faso, the French presidency said in a statement.
He calls for the immediate release of all people arrested, the reinstatement of transitional authorities and the resumption of the electoral process.
Yesterday, members of the presidential guard who are loyal to Compaore burst into a cabinet meeting and seized president Michel Kafando, Isaac Zida, the prime minister, and two ministers.
UN Secretary-General Ban Ki-moon and the EU have condemned the leaders' detention and called for their immediate release.
Compaore was toppled in October 2014 and fled into exile in Ivory Coast after an uprising triggered by his attempt to extend his 27-year rule.
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