Authorities in Allentown said the suspect shot at responding officers, who returned fire, at about 3:20 p.m. Tuesday.
Police cordoned off several blocks. WFMZ-TV says two school buses were held back at a middle school and officers were sent to guard the students.
Witnesses told The (Allentown) Morning Call that the nearby American Parkway Plaza shopping center was also evacuated.
Assistant Chief Joe Hanna told the paper that two officers were taken to the hospital to be checked out, but he didn't believe they had been shot. Police later said a third officer was also being evaluated at the hospital.