Earlier, heavy gunfire rang out near a government compound where Embalo had been chairing a cabinet meeting.
He added that the attack “was well prepared and organised and could also be related to people involved in drug trafficking”, giving no further details.
Poverty-stricken Guinea-Bissau is viewed by the United Nations as a major waypoint for Latin American cocaine headed for Europe.
“I can assure you that no camp joined this attempted coup. It was isolated. It is linked to people we have fought against,” he said, without elaborating.
He said arrests had begun of people involved, but he did not know how many.
Portugal’s President Marcelo Rebelo de Sousa said on his official website he had spoken to Embalo by telephone and had “conveyed his vehement condemnation … of these attacks against the constitutional order of Guinea-Bissau”.
During the hours of confusion on Tuesday, the Portuguese embassy had urged its citizens in Guinea-Bissau to stay at home while U.N. Secretary-General Antonio Guterres said he was “deeply concerned” by what was going on in the capital Bissau.
Embalo had begun chairing an extraordinary cabinet meeting at around 10 a.m., entering the government palace with a heavy security detail, a diplomatic source said. While he was present in the building, gunfire began outside.
The cabinet meeting was being held to prepare for a forthcoming ECOWAS summit in response to last week’s military takeover in Burkina Faso, the latest in a rash of coups across the region in the last 18 months.
“It looks increasingly hard to argue against the idea of coup contagion,” said Eric Humphrey-Smith, an analyst at risk consultancy Verisk Maplecroft.
“When added to successful coups in Mali, Burkina Faso, Guinea and Chad in the past year, there is no doubt that West African leaders are nervously looking over their shoulders.”