At least six people died and 24 were wounded in a shooting at a July Fourth parade in the Chicago suburb of Highland Park, and officers are searching for a suspect who likely fired on the festivities from a rooftop, police said.

Highland Park Police Commander Chris O'Neill, the incident commander at the scene, urged people to shelter in place as authorities search for the suspect, described as a white male wearing a white or blue T-shirt.

Lake County Major Crime Task Force spokesman Christopher Covelli said at a news conference that the gunman apparently opened fire on parade-goers from a rooftop using a rifle that was recovered at the scene.

Covelli said police believe there was only one shooter and warned that he should still be considered armed and dangerous.

Police said a perimeter around the area was "secure" and they were continuing searches.

A senior police official described the suspect as "male, white, 18 to 20 years old". "A firearm has been recovered from the scene," he said.

"At this time, two dozen people have been transported to hospital. Six are deceased."

Earlier, police confirmed they were responding to a shooting at a July Fourth parade in a Chicago suburb.

Witnesses described seeing bloodied bodies covered with blankets as hundreds of people ran for safety.

The Chicago Sun-Times reported that the parade began around 10am but was suddenly halted 10 minutes later after shots were fired. A Sun-Times reporter saw blankets placed over three bloodied bodies. Several witnesses told the newspaper that they heard gunfire.
Hundreds of parade-goers - some visibly bloodied - fled the parade route, leaving behind chairs, baby strollers and blankets.

Police told people: "Everybody disperse, please. It is not safe to be here."

Terrified parade-goers after shots were fired, leaving behind their belongings as they sought safety. Photo / Lynn Sweet, Chicago Sun-Times via AP

Video shot by a Sun-Times journalist after the gunfire rang out shows a band on a float continuing to play as people run past, screaming. A photo posted to social media appeared to show pools of blood near upturned chairs in downtown Highland Park.

Gina Troiani and her son were lined up with his daycare class ready to walk onto the parade route when she heard a loud sound that she believed was fireworks - until she heard people yell about a shooter.

"We just start running in the opposite direction," she told The Associated Press.

Her 5-year-old son was riding his bike decorated with red and blue curled ribbons. He and other children in the group held small American flags. The city said on its website that the festivities were to include a children's bike and pet parade.

Troiani said she pushed her son's bike, running through the neighbourhood to get back to their car.

In a video that Troiani shot on her phone, some of the kids are visibly startled at the loud noise and they scramble to the side of the road as a siren wails nearby.

It was just sort of chaos," she said. "There were people that got separated from their families, looking for them. Others just dropped their wagons, grabbed their kids and started running."

Illinois Governor JB Pritzker said in a tweet that he is "closely monitoring the situation in Highland Park" and that Illinois State Police are assisting. The ISP said in an email that it was assisting in the response to an active shooter reported around 10.24am.

The Lake County Sheriff's Office said on Twitter that it is assisting Highland Park Police "with a shooting in the area of the Independence Day parade route".

Highland Park is in the northern suburbs of Chicago. Image / Google

Debbie Glickman, a Highland Park resident, said she was on a parade float with co-workers and the group was preparing to turn onto the main route when she saw people running from the area.

"People started saying: 'There's a shooter, there's a shooter, there's a shooter'," Glickman told the Associated Press. "So we just ran. We just ran. It's like mass chaos down there."

She didn't hear any noises or see anyone who appeared to be injured.

"I'm so freaked out," she said. "It's just so sad."

-  Michael Tarm, Roger Schneider & Kathleen Foody, AP