The National War Memorial stands in Confederation Square in the heart of downtown Ottawa. The Parliament Buildings are to the northeast.
Scott Walsh, who was working on Parliament Hill, said he saw a man running with a double-barrelled shotgun, wearing a scarf and blue jeans.
The Prime Minister's Office said Stephen Harper is safe and not on Parliament Hill. Opposition Leader Tom Mulcair and Liberal Leader Justin Trudeau are also safe, reports said.
The US Embassy was also locked down after reports of shots being fired.
The US and Canadian air defenses were placed on heightened alert after the shootings.
The attack came two days after a recent convert to Islam killed one Canadian soldier and injured another in a hit-and-run before being shot to death by police.
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