Snipers assassinated Serbia's prime minister as he walked into government headquarters at midday Wednesday, silencing a pro-Western leader who helped topple Slobodan Milosevic and declared war on organized crime.

The slaying of Zoran Djindjic in downtown Belgrade prompted the government to impose a nationwide state of emergency amid fears the Balkan nation could plunge into a violent power struggle. The Cabinet declared three days of mourning.

It was the first assassination of a European head of government since Swedish Prime Minister Olof Palme was gunned down in Stockholm in 1986.

Djindjic, 50, died in a hospital after being shot in the abdomen and back, said Nebojsa Covic, a deputy prime minister. One of Djindjic's bodyguards was wounded, police sources said.

Police sources told The Associated Press two snipers firing from a building across from government headquarters shot Djindjic as he slowly left his car on crutches after suffering a soccer injury to his foot. A high-powered bullet left a dent on Djindjic's armored car.

Two suspects were arrested, witnesses said. But police, unsure they were the gunmen, launched a nationwide search, setting up roadblocks in Belgrade and halting bus, rail and plane traffic from the capital. Witnesses said the suspects fled in a red car.

The government blamed Milorad Lukovic, a warlord loyal to Milosevic, and several other top underworld figures for organizing the killing.

"Their aim was to trigger fear and chaos in the country," a government statement said.

The U.S. Embassy urged Americans in Serbia to exercise caution after the assassination, which occurred three blocks from the embassy.

Citing danger to "constitutional order," acting President Natasa Micic imposed a state of emergency, giving the military the same powers as police to investigate and detain suspects without a warrant.

"The state will use all means at its disposal until the perpetrators of this crime ... are brought to justice," Micic said.

Under the constitution, Micic must nominate a successor to be approved by the Serbian parliament. Funeral plans for Djindjic were not immediately announced.

Djindjic had many enemies because of his pro-reformist and Western stands.

He was despised by some for arranging the extradition of Milosevic to the U.N. war crimes tribunal in The Hague, Netherlands, in 2001, and for urging more arrests of war crimes suspects.

He also was targeted by Serbian crime bosses and warlords who were allied with the former Yugoslav president.

When Milosevic was toppled in October 2000 in a popular revolt, Djindjic admitted luring key mob figures into changing sides. But later, he turned against them, declaring an open war on the rampant smuggling of contraband goods and drugs.

Drive-by shootings, explosions and mafia-style shootouts have been commonplace in Serbia, which still is recovering from Milosevic's ruinous 13-year rule.

"Dark forces who have mushroomed in the country since the 1990s are trying to turn back the clock," said Dobrivoje Radovanovic, an independent crime expert.

After the killing, police carrying machine guns stopped traffic in Belgrade, searching cars and checking passengers. Police also took up positions in front of government buildings and the central post office. The hospital where Djindjic was taken was blocked by police and Djindjic's sobbing wife, Ruzica, was led from the building.

Djindjic often was criticized by opponents for seeking too much power and for "mercilessly" confronting political rivals.

He recently promised to try to arrest Ratko Mladic, a former Bosnian Serb military commander wanted by the U.N. tribunal. Mladic is thought to be hiding in Serbia.

Djindjic also was engaged in a bitter political feud with Vojislav Kostunica, who stepped down as Yugoslav president after Yugoslavia was abolished last month and replaced by a new state renamed Serbia and Montenegro. The feud virtually paralyzed much-needed economic and social reforms.

Kostunica said that while he disagreed with Djindjic on many issues, the assassination was "awful .... This shows how little we have done to democratize society." He told B-92 radio the killing was "a warning to look ourselves in the eye and ask how much crime has permeated all the pores of society."

The assassination heralds turbulent days for Serbia. A bitter power struggle for Djindjic's successor could affect cooperation with the West, particularly over arresting and handing over indicted war crimes suspects.

Slobodan Vucetic, the head of Serbia's Supreme Court, called Djindjic one of the "most talented, most intelligent, and bravest" of politicians of the new generation in Serbia.

"Personally, I am now afraid for the future of Serbia," Vucetic said.

It appears this was not the first attempt on Djindjic's life. Last month, a truck suddenly cut into the lane in which his motorcade was heading to Belgrade's airport. The motorcade narrowly avoided a collision.

President Bush expressed condolences, saying Djindjic "will be remembered for his role in bringing democracy to Serbia and for ... bringing Slobodan Milosevic to justice," White House spokesman Ari Fleischer said.

Chief U.N. war crimes prosecutor Carla Del Ponte said Djindjic's death could set back the tribunal's efforts.

"He worked very hard to help us," Del Ponte said. "He did not hesitate when sometimes it was not easy for him politically."

Djindjic was born in 1952 into the family of a Yugoslav army officer in Bosanski Samac near the Bosnian border. He was raised and educated in Belgrade, and was married with a son and daughter.

A German-educated technocrat, Djindjic was known to supporters as "The Manager" for his organizational skills but detractors called him "Little Slobo" for his authoritarian tendencies.

Djindjic's trade of Milosevic for $1.2 billion in international economic aid appeared to have won respect from people desperate to improve a standard of living that ranks among the lowest in Europe.

Jovan Dimitrijevic, a retiree in his 70s, wept as he laid a single red rose at the site of the assassination.

"This is the work of criminal minds, those who want to pull us back into Milosevic's darkness," he said.