Deadly Texas bar shooting is 'potentially an act of terrorism', FBI says

Two people were killed and several injured in a shooting outside a bar in Austin, Texas, in an incident the FBI says may be related to terrorism.

Police said they were called to the scene near Buford's bar in the capital of the southern US state around 2 am (0700GMT) on Sunday, following reports of a "male shooter".

In addition to the two deceased victims, the suspected gunman was also dead at the scene, police said. Seventeen people were hurt, with 14 of them taken to hospital.

Police have not identified the victims or the suspect and have not commented on a potential motive, nor offered details about the incident's possible terrorism connection.

Austin Police Chief Lisa Davis said officers responded to reports of a man with a gun at Buford's on West Sixth Street, a popular entertainment district in the city.

A man in a large SUV put on his flashers, rolled down his window and fired a pistol, striking people on the patio and sidewalk outside the bar, said Davis.

She said he then parked the vehicle nearby, got out with a rifle and started walking back towards the bar. Three police officers coming toward him shot and killed the suspect at an intersection, according to Davis.

The SUV was searched and was not carrying explosives, officials said. However, Acting Special Agent in Charge Alex Doran, from the FBI's San Antonio office, said there were indications in the SUV and on the suspect that suggested a "nexus to terrorism".

But Doran said the investigation was in its early stages and he was "not prepared to release those details".

"We are committed to seeing this process through to the very end," he said.

Of the 14 people taken to the hospital, three are in critical condition Austin-Travis County Emergency Management Services head Rob Luckritz said.

Davis said that because of increased police and emergency resources in the entertainment area over the weekend, they were able to "rapidly" respond to the scene.

Austin Mayor Kirk Watson praised the response by police and rescuers, which officials said took 57 seconds.

"I'm very thankful for the speed," said Watson. "They definitely saved lives."