The attacker -- later identified as Mevlid Jasarevic, aged 23, of Novi Pazar, Serbia -- was slightly wounded by a police sniper and was taken to hospital.

He was admitted with an entry-and-exit wound to the right upper leg, hospital spokeswoman Biljana Jandric said in the evening, adding that there was no reason for him to be detained in hospital after receiving medical treatment.

The attacker fired dozens of bullets at the embassy building, wounding a police officer. The policeman received medical attention and his life was not in danger. Police initially said that the gunman was killed.

Television footage showed a young man armed with a Kalashnikov assault rifle and wearing a beard, a raincoat and calf-length trousers. Eyewitnesses described him as a Wahhabi, a follower of a radical branch of Islam, and quoted him as saying, "I don't want to shoot at my Muslim brethren but at Americans."

The US embassy confirmed that several bullets fired by the attacker hit the embassy building, and that none of the diplomats or embassy staff were hurt.

Ambassador Patrick Moon expresses his deep gratitude to the local police for stopping the attack on the embassy building, embassy spokeswoman Sanja Pejcinovic said.

Sarajevo cantonal interior minister Muhamed Budimlic told a news conference that two more persons had been arrested in connection with the attack, but did not give any details of their involvement. "It's good that there were not more casualties given the fact that the shooting took place in the city centre," he said.

The attack prompted reactions from state officials and political parties.

The Chairman of the tripartite Presidency of Bosnia and Herzegovina, Zeljko Komsic, said the attack on the US embassy was an attack on Bosnia and Herzegovina as a state and all its citizens.

He noted that the attack occurred on a day when the foreign ministers of Israel and the Palestinian National Authority were visiting the country, the possible motive being to compromise the reputation of Bosnia and Herzegovina as a safe country.

"Our country is not a safe haven for terrorists, and its peoples do not support anything that endangers peace, security or anyone's life," said Komsic in a statement to the media.

Komsic added that according to available information, the attacker was a foreign national known from before to security services, not only in Bosnia but in other countries as well.

Komsic said that the security services and police agencies in the country were able to guarantee security for all US citizens as well as diplomatic staff and were prepared to take necessary measures to ensure their safety.

The Bosniak member of the Presidency, Bakir Izetbegovic, described the attack as "an insane act of terrorism", calling for "an urgent and effective investigation".

The Bosnian Federation's prime minister, Nermin Niksic, said that this was an attack on the peace in Bosnia and Herzegovina. "We will take all available measures under our authority to shed full light on this case," he said.

Mayor Alija Behmen also condemned the attack, saying that a full investigation would prevent any speculations about the attacker's motives. "Such speculations could only further threaten the security situation in Sarajevo and entire Bosnia and Herzegovina," he added.

For that reason Behmen would not comment on media reports that Jasarevic had spent some time in Gornja Maoca, a village in central Bosnia known as the seat of one of the communities that gather together former Mujaheddin fighters.

Media said that Jasarevic had a police record for previously threatening US diplomats in Serbia, and that he had also been arrested by police in Austria.

The predominantly Bosniak Party of Democratic Action (SDA) also joined in the condemnation of the attack. "It is an attack on the friendly American people who proved their friendship with Bosnia and Herzegovina in the most difficult and decisive moments during the military aggression on our country. We demand of all relevant authorities of Bosnia and Herzegovina to identify responsibilities and possible omissions concerning the security of the US embassy building. We also demand that the perpetrators of this criminal attack and their assistants and superiors be identified and brought to justice as soon as possible. The attack on the US embassy is also an attack on the State of Bosnia and Herzegovina," the party said in a statement.

The US State Department said later that there were no reports of injuries among the embassy staff in Sarajevo. Spokesman Mark Toner said in a statement local security forces had responded to the attack and that the embassy was locked down.

A number of shots hit the embassy building, CNN quoted the State Department as saying.