Two Chinese students in their 20s were shot dead in the Canadian capital of Ottawa on Tuesday morning.

The Chinese Embassy in Canada confirmed to China Daily yesterday that the two students, both male, were shot at Fullhouse Karaoke Tea Caf in the city's Chinatown area at about 2:45am.

Local newspapers said one man died instantly after being shot in the head, while the other who was shot about 10 times succumbed to injuries in hospital.

Police believed that they were friends and were hanging out at the cafe as part of a larger group when an altercation arose between them and a second group of people, Ottawa Sun reported.

As the situation escalated, a single gunman fired a handgun at the victims before fleeing, the report said, adding that police would not speculate if the killings were gang related.

Jamie Bauer, 33, was walking along Somerset Street when he heard screaming and saw men running out of the bar.

"I saw a dozen guys running from the front doors across the road, down the street," he was quoted by the Sun as saying. "I heard a lot of screaming."

People in the neighbourhood speculated that two parked cars a silver Mercedes Kompressor and a bright blue Ford Mustang that sat across the street from the crime scene, belonged to the two dead men, the report said.

Both had Quebec licence plates and stickers of the Chinese flag and the 2008 Beijing Olympic Games.

Wang Pengfei, an education officer at the embassy, told China Daily that "copies of their passports showed the students were from Northwest China's Qinghai Province and North China's Inner Mongolia Autonomous Region."

Their relatives in China had been informed and would arrive in Ottawa as soon as possible, Wang said.

He declined to reveal any other details, such as the students' names, only noting that local police had sealed off the site of killings and the case was still under investigation.

Xinhua reported that the two students were with the Algonquin College and Carleton University, and said there were a few shooting incidents two weeks ago in the city. But local police would not link the incidents to the double homicide.

Embassy figures show that there are about 50,000 Chinese students in Canada, including more than 2,000 in the capital. An urgent notice was issued by the embassy to warn Chinese citizens to be vigilant when they travel or live in Canada.