WELLINGTON, New Zealand -- A New Zealand town was on high alert Monday after police said a gunman killed two people and injured a third at an unemployment office before escaping on a bicycle.

The incident began about 10 a.m. in the South Island town of Ashburton.

Police said they are urging residents to remain inside if they can and have deployed a "full police response." They said the man should not be approached.

According to police, the man entered a Work and Income New Zealand office and started shooting.

A witness said the man was wearing a black balaclava and shot at two women, according to the Ashburton Guardian newspaper. Other witnesses told the paper the man was carrying a shotgun.

Police Superintendent Gary Knowles told reporters that John Henry Tully, 48, was a person of interest in the shooting, according to The New Zealand Herald newspaper. Knowles said a thorough search was taking place around the Ashburton River, where the manhunt had headed.

Ashburton Mayor Angus McKay said the town was very community-minded and the tragedy would affect many lives: "It just hits home real hard," he said, according to the Herald.

Police said the injured person was in a serious but stable condition in an area hospital.

Ashburton is home to about 18,000 people and is 90 kilometres (56 miles) southwest of Christchurch.