A gunman has been shot dead inside the Canadian parliament building in the capital Ottawa, but police are reporting there may be other shooters on the loose.

The gunman is believed to have shot a soldier at the Canadian War Memorial before being chased by police inside the main parliament building.

At least 30 shots were fired inside, according to witnesses and media. A reporter from the Canadian news outlet The Globe and Mail managed to capture the exchange of gunfire inside the Parliament Hill building.

Police also report that more shots at locations surrounding Parliament Hill have been fired, and have warned residents of Ottawa to stay away from windows and roofs as they continue to search for suspects, despite early reports of a gunman being killed inside parliament.

The wounded soldier was taken into an ambulance where doctors were giving him cardiopulmonary resuscitation.

The gunman reportedly hijacked a car at gunpoint and drove it to Parliament Hill, before going on the rampage.

The attack came a day after a 25-year-old Muslim convert was shot dead by police after he killed a Canadian solider and injured a second near Montreal.

Police said the man, Martin Couture Rouleau, had recently become influenced by radical Islam, with friends suggesting he acted in response to an appeal by the Isis (Islamic State) group for jihadi sympathisers across the world to launch 'lone wolf' attacks on westerners "wherever they can be found".

Canada raised its national terror threat level from low to medium following the attack.