Agent Barry Lee Bush, 52, assigned to the Newark office, died after agents confronted three men suspected in a series of armed bank robberies.
"Preliminarily, information suggests the agent may have been fatally wounded as a result of the accidental discharge of another agent's weapon during a dynamic arrest situation," the FBI said in a statement Thursday night.
Bush and his team were tracking a group of men believed to be responsible for four robberies, the FBI said. In two of the robberies, the suspects had fired assault weapons while inside the bank, the agency said.
When the agents found three suspects outside a bank on Route 22 in Readington around noon Thursday, a shootout ensued and Bush was hit.
Two suspects were captured, and one was being sought in nearby woods, officials said. State and local authorities are searching for the suspects with helicopters and dogs.
Josh Bavosa, 35, said he was making a business deposit at the PNC Bank when heard three gunfire bursts that sounded as if they were from an automatic weapon.
When he looked out the window, Bavosa said, he saw law enforcers swarming around a car, pulling two people out and ordering them onto the ground.
State police were coordinating the search for the third suspect, Capt. Al Della Fave said. Close to 100 officers fanned out in the area near a golf course.
Police in Readington had secured several buildings and barns and were urging residents and business owners to lock their doors and not approach the suspect.
A law enforcement official, speaking anonymously because the investigation was ongoing, said the suspects in the shootout were part of a group of young men in their 20s who had been followed by FBI and state police for 2½ weeks.
Other members of the bank robbery group had been arrested elsewhere in the state, said the official, who thought more arrests were possible.
Bush, 52, joined the FBI in August of 1987, serving in Kansas City and transferring to Newark in 1991. He is survived by a wife and two grown children, the FBI said.
Giovanni Finazzo, owner of Mangia Bella, a nearby pizzeria, said that other than a string of break-ins several years ago, there is not much crime in the area.
"Are you kidding?" Finazzo asked. "After 7 o'clock, you don't even see a ghost in this town."