Police in Montenegro have launched a manhunt after a gunman killed at least 10 people, including two children, in a killing spree that started in a village restaurant near the southern town of Cetinje on New Year’s Day.

The suspect "took the lives of at least 10 people, two of whom were minors", Interior Minister Danilo Saranovi? told journalists.

The two minors killed were the children of the restaurant owner, who was also killed, he added. The shooter had also "killed members of his own family".

"A terrible tragedy has struck all of us in Cetinje, in the village of Bajice near Cetinje" Prime Minister Milojko Spaji? told RTCG.

Four people seriously wounded in the attack were fighting for their lives in hospital in the capital Podgorica, Spaji? said.

The government declared three days of national mourning from Thursday.

"All police teams, special units, and all available forces are in Cetinje. We are searching for the perpetrator, and we are on the right track," the prime minister said.

Police had initially said that the killings took place in a restaurant in the village of Bajice. But police chief Lazar Scepanovi? later told reporters that people were killed at four different locations.

The suspect had "consumed alcoholic beverages all day" before the incident between him and another guest, said Scepanovi?.

He then "went home, took a weapon, used firearms and killed four people at one location".

An earlier police statement had identified the shooter as "A.M., 45" and ruled out the shootings being a "showdown between organised criminal groups".

Spaji? confirmed that in his comments to state broadcaster RTCG.

"It was simply a restaurant fight where guns were drawn and everything went in a different direction in which it should not have gone", said the prime minister.

He also announced he would be tightening the criteria for firearms possession.

"This is a tragedy after which we must ask ourselves who should be allowed to possess firearms in Montenegro," said Spaji?.

At the scene, police urged people not leave their homes and said they had sent special forces to the area.

Police had sealed off the area surrounding the restaurant, said an AFP photographer. Dozens of officers, police vehicles and at least one ambulance were at the scene.

"Our thoughts tonight are with the families who lost their loved ones and the citizens of Cetinje, President Jakov Milatovi? said on X.

"The whole of Montenegro feels and shares your pain. We pray and hope for the recovery of all the wounded."

In 2022, a man murdered 10 Cetinje residents, including two children, in broad daylight before being killed, one of the deadliest such incidents to rock the Balkan country.

Organised crime and corruption have remained two major issues plaguing Montenegro which authorities have pledged to tackle under pressure from the European Union that the tiny nation aspires to join. (AFP)

•PHOTO: Police investigators work at the site of a shooting in Cetinje, Montenegro, Jan. 1, 2025. At least 10 people, including two children, were killed in the shooting that followed a bar brawl.