The gunman, who was shot dead by police immediately afterwards, has been identified as Jeffrey Johnson, 53, who had worked as a designer of women`s accessories at apparel firm Hazan Imports for six years. He was laid off from his job a year ago when the company underwent downsizing.
New York Police Commissioner Raymond Kelly told reporters outside the crime scene here that the victim, a 41-year-old male, was a "former co-worker" of Johnson`s. Nine other people have been injured in the shooting, some of them by the police officers who were confronting the gunman, and they are expected to recover soon.
"This is a terrible tragedy and there is no doubt the situation could have been more tragic but for the acts of heroism by the police officers," New York city Mayor Michael Bloomberg, who was at the scene of the shooting, told reporters.
"New York city is the safest big city in the US but we are not immune to the national problem of gun violence," Bloomberg said.
The shooting happened a little after 9 am (local time) as the streets outside the iconic Empire State Building were getting packed with tourists and New Yorkers going to their jobs.
Kelly said Johnson walked up to the 33rd street office of the company near the Empire State building and "in a dispute with one of the former employees in front of the building, Johnson produced the pistol and fired at close range."
He shot at the victim three times and a bullet struck the victim in the head. Johnson then fled the scene but was followed by a construction worker, who alerted two uniformed police officers stationed outside one of the entrances of the Empire State Building.
Kelly said as the two officers approached Johnson, he pulled out his 45 calibre semi-automatic pistol from a black bag and fired at the officers, "trying to kill them." "The officers returned the fire and killed him," Kelly said.
Bloomberg said nine other people were shot, of which "some may have been shot accidentally by the police officers who responded immediatley and while confronting the suspect."
Bloomberg said the injured, two women and seven men, were rushed to the hospitals. They are "not seriously wounded" and are expected to "recover quickly."
Bloomberg sought to assure New Yorkers that the incident "has nothing to do with terrorism and is a murder case". Kelly said the gunman had lived in Manhattan.
The identity of the victim has not been released yet as the authorities are notifying his family first.
Bloomberg said the authorities do not have any criminal record for Johnson and they are yet to determine as to what argument or interaction may have happened between the gunman and the victim before he opened fire.
Kelly said the investigation into Johnson`s background is "ongoing".
Some of the nine people who have been wounded "got grazed during the exchange and are not likely to die," Kelly added.
"A number of shots" were fired during the exchange between the gunman and the police officers and apart from the shooter and one victim, no other person was fatally shot, Bloomberg said.
The incidnet comes even as the country is recovering from a shooting massacre at a theatre in Aurora, Colorado where a gunman opened fire during a screening of the batman movie `the Dark Knight Rises` killing 12 people and injuring over 50.
Earlier this month, a gunman named Michael Wade Page had fired indiscriminately in a gurudwara in Wisconsin killing six members of the Sikh community and serioulsy wounding three others.
The frequnet shooting rampages across the country have opened a debate on the gun laws.
After the gurudwara shooting, Bloomberg had criticised President Barack Obama and Republican Presidential nominee Mitt Romney for avoiding the issue of gun laws, which he said are putting weapons in the hands of "dangerous people".
"The two presidential candidates have not given the American people a plan to keep guns out of the hands of dangerous people. The fact that terrorists, mentally ill people and criminals all have easy access to guns is a national crisis," Bloomberg had said.
The New York mayor had said everyday 34 Americans are murdered with guns and Obama and Romney "cannot continue avoiding an issue which is one of the most serious threats we face in the the security of our nation".