* UPDATE: Gunman reported dead; state officials investigating *

PRINCETON — Police have closed off the busy downtown area near Palmer Square because of an armed man with a gun at Panera.

Police on Tuesday afternoon said a man is inside the restaurant on Nassau Street between Washington and Witherspoon streets across from the Princeton University campus. It was not immediately clear if there was a hostage involved.

Princeton Police said the immediate area of the store was evacuated and negotiations continued with the man. There was no threat to the public, according to police, who said people should steer clear.

 

Princeton University sent an incorrect alert stating that there had been shots fired. A subsequent message to their students and staff said that report had been mistaken and there was no shelter-in-place order.

Suzannah Troy told New Jersey 101.5 that she saw an older man taken from the restaurant and appeared to be shaken up. Video by Troy shows police with drawn guns in front of the restaurant.

"Downtown Princeton looks like an armed camp," photo journalist Brian McCarthy said, adding that Princeton Police, State Police K9 dogs, the FBI and SWAT teams are all present.

Princeton Police Chief Kevin Sutter told Planet Princeton that police are trying to negotiate with the man.

"Sheriffs are out  there waiting for something to go down...they have 4 SWAT inside and man is hiding behind a corner," Janet Lopeztoca, who is on lockdown in an office about Panera,  told New Jersey 101.5. Lopeztoca said that she had not yet heard any shots fired.

Jackelyn Ovalle said said her husband, who works in the area, was not allowed to remove his parked car on Witherspoon.

Princeton University said Henry House and Scheide-Caldwell were evacuated as a precaution. Although there is no immediate threat, all Princeton Public Schools are sheltering in place, according to superintendent Steve Cochrane.

This is a breaking story. Check back for additional details.

Contact reporter Dan Alexander at Dan.Alexander@townsquaremedia.com or via Twitter @DanAlexanderNJ.