Officials later said the suspect taken into custody died and authorities identified the man on the run as the "white-hat" suspect, referencing photographs released by the FBI Thursday. Authorities warned he should be considered armed and dangerous.
The standoff in Watertown, Mass., erupted shortly after the fatal shooting of a Massachusetts Institute of Technology police officer. A transit police officer was also wounded in the Watertown fire fight, officials confirmed to NBC affiliate WHDH.
Officials in Watertown were warning residents to "stay in their homes and not open their doors unless a police officer is there."
"There is a terrorist on the loose," said one officer at an impromptu press conference at about 4:30 a.m. ET.
The suspect at large — believed to be the man who physically placed the bags containing the homemade bombs which killed 3 and injured 170 on Monday — was described as "dressed in a grey hoodie, light skinned male, brown curly hair."
Watertown resident Andrew Kitzenberg described the earlier police standoff outside his house. “They engaged in gunfire for a few minutes,” Kitzenberg said. “They were also utilizing bombs, which sounded and looked like grenades, while engaging in the gunfight. They also had what looked like a pressure-cooker bomb.”
The gunmen used "bombs that looked like grenades," Kitzenberg told NBC News.
Kitzenberg said when he looked out the window he saw two people taking cover between a black Mercedes SUV and a sedan, and watched them shooting 70 or 80 yards toward six Watertown police vehicles.
He said the pair took cover behind the Mercedes SUV and were shooting westward toward the police officers. They also had backpacks.
“It was a firefight,” he added. “There was a long exchange of gunfire.”
Police with guns drawn search for a suspect on April 19, 2013 in Watertown, Mass. Earlier, a Massachusetts Institute of Technology campus police officer was shot and killed late Thursday night at the school's campus in Cambridge. A short time later, police reported exchanging gunfire with alleged carjackers in Watertown, a city near Cambridge. It's not clear whether the shootings are related or whether either are related to the Boston Marathon bombing.
One of the shooters then ran toward the officers, while the other got into the SUV, Kitzenberg recounted.
The person on foot later fell to the ground, but Kitzenberg said he was unable to tell whether he had been tackled or shot.
The other drove the SUV through the line of police cars at the end of the street, he added.
Kitzenberg said that while he had a “very clear view of the shooters,” he couldn’t see their faces but described them as “average size, average height.”
During the gun battle, a bullet ended up in the wall of Kitzenberg’s apartment, which is on the second level of a multi-family home.
Rebecca Carbone, 30, stood on the street wearing pajamas and a sweatshirt and had stepped out when she heard sirens.
"We heard a loud blast and we didn't know what it was," Carbone said. "It sounded like a car backfiring."
John Grimes, 69, a retired letter carrier, said that he heard three loud explosions, "and you don't hear explosions at night a lot."
The tense situation in Watertown followed an hours-long lockdown at MIT, where the campus police officer was shot and killed while investigating a disturbance on the Cambridge campus.
Even as police swept the campus, there were reports of a violent car chase and then an extremely heavy police presence in Watertown, which is only about four miles away.
The events began unfolding with reports of shots fired on the MIT campus at 10:48 p.m. ET, and the situation remained "active and extremely dangerous" for hours, according to MIT's emergency website. It was later reported that a campus officer had been fatally shot several times.
The MIT police officer was found shot multiple times in his vehicle, the Middlesex District Attorney’s office said in a news release. Authorities launched an investigation into the circumstances of the shooting and determined that two males were involved in the shooting.
A short time later, police received reports of an armed carjacking by two males in the area of Third Street in Cambridge, the DA’s statement read.
“The victim was carjacked at gunpoint by two males and was kept in the car with the suspects for approximately a half hour. The victim was released at a gas station on Memorial Drive in Cambridge. He was not injured.”
Police went in pursuit of the stolen vehicle, following it into Watertown. During the chase, explosive devices were reportedly thrown from the car by the suspects, the DA’s statement said.
A Massachusetts Bay Transportation Authority police officer was also severely injured in an ensuing gunfire exchange between the police and the suspects in the area of Dexter and Laurel streets.
The university expressed its condolences in a statement: "MIT is heartbroken by the news that an MIT Police officer was shot and killed in the line of duty on Thursday night on campus, near Building 32 (the Stata Center). Our thoughts are now with the family."
By Becky Bratu, Kerry Sanders and Tom Winter: usnews.nbcnews.com
