Armed with explosives and guns, the Boston Marathon bombing suspects battled law enforcement officers in a Boston suburb early Friday morning.
The two men unleashed chaos and killed an MIT campus officer before police took one of the men into custody and the other fled, officials said.
The suspect taken into custody later died. Officials identified the man on the run as the "white-hat" suspect, referring to the photos released by the FBI Thursday.
Authorities warned he should be considered armed and dangerous.
The standoff with the suspects in Watertown, Mass., erupted after the fatal shooting of a Massachusetts Institute of Technology police officer.
A transit police officer was also wounded in the Watertown firefight.
Officials in Watertown were warning residents to "stay in their homes and not open their doors unless a police officer is there," according to reports.
"There is a terrorist on the loose," said one officer at an impromptu press conference at about 4:30 a.m. Friday morning, after the intense battle.
The suspect at large is believed to be the man who physically placed the bags containing the homemade bombs which killed 3 and injured 170 on Monday.
He is described as "dressed in a grey hoodie, light skinned male, brown curly hair," with international links and having been in the country legally a year.
The suspects approached the MIT officer and shot him in head, sources said, then stole the MIT officer's cruiser, robbed a nearby 7-11 and carjacked a Mercedes.
They briefly kidnapped the driver of the SUV, and the suspects threw explosives out the window of the moving car in what was a harrowing and chaotic scene.
The dead suspect had an improvised explosive device strapped to his chest and law enforcement sources warned that the suspect on the run may as well.
The intense situation in Watertown followed an hours-long lockdown at MIT, where the campus police officer was shot and killed while investigating.
A disturbance was reported on the Cambridge campus. It is not clear exactly what, but the suspects are believed to have killed the MIT officer and fled.
Even as police swept the campus, there were reports of a violent car chase and then an extremely heavy police presence in Watertown, 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.
It was later reported that a campus officer had been killed.
Watertown resident Andrew Kitzenberg described the police shootout outside his house that followed when officials tracked down the Boston bombing suspects.
“They engaged in gunfire for a few minutes,” he told NBC News. “They were also utilizing bombs, which sounded and looked like grenades, [during] the gunfight."
"They also had what looked like a pressure-cooker bomb.”
Kitzenberg said two people took cover between a black Mercedes SUV and a sedan, and began shooting 70 or 80 yards toward six Watertown police vehicles.
“It was a firefight,” the witness added. “There was a long exchange of gunfire.”
One of the shooters then ran toward the cops, while the other got into the SUV.
The person on foot later fell to the ground, either 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.”
Story developing ...
UPDATE: The two bombing suspects are brothers, aged 19 and 20, and legal permanent U.S. residents of Chechen origin, law enforcement sources say.