CNN said that the one of the gunmen, who was armed with a high-powered rifle, had been killed by police. It also said two hand guns were recovered from the scene.
David Paterson, the governor of New York, told CNN "that there are fatalities. We are monitoring the situation and I have directed the State Police to assist the Binghamton Police Department, in any way, they can."
Eyewitnesses earlier told a CNN reporter that police had taken two Asian men, who were both handcuffed, out of the American Civic Association building, which is currently surrounded by police snipers. The men have been taken to a local detention center.
Sky News said that FBI negotiators and SWAT teams had entered the building, 140 miles from New York, and freed 20 hostages. However, around 40 hostages are reported to still being held hostage.
Police are reported to be conducting a room-by-room search of the building.
A third suspect is also being sought.
