Gunshots were heard from the Estonian Defense Ministry building in Tallinn on Thursday, a police spokesman said.
Witnesses said people were jumping out of the ministry building's windows.
Police have cordoned off the area. A gunman is believed to be still inside the building.
Local media reported, citing a source in the Defense Ministry, that the gunman is a former military man. At first he threatened staff with an explosive device and then opened fire.
The source also said that the assailant is thought to have taken two hostages and wounded one man.