BELGRADE, Serbia (CNN) --Serbian Prime Minister Zoran Djindjic, who played a key role in the overthrow of Slobodan Milosevic, has been shot dead by a sniper.

The government said after Wednesday's assassination it would seek to declare a state of emergency, and local media reported all flights from Belgrade airport had been suspended.

Djindjic, 50, was hit twice in the chest in front of the main government building in Belgrade at about 12:45 p.m. local time (1145 GMT) on Wednesday. He underwent emergency surgery but doctors were unable to save his life, hospital officials said.

Another person was wounded in the shooting, police said.

A sniper was reported to have been seen in the area, according to Serbian television. Police were stopping cars and searching them in the area around the shooting. Three people have been arrested, according to state TV.

Officials are speculating that the shooting could be linked to a crime wave in the country and the government's efforts to stamp out crime.

An emergency session of the Serbian government was convened, government officials said, and Djindjic's assassination was announced. At the beginning of the session, there was a moment of silent.

A senior official of Serbia's ruling coalition said the government, which confirmed Djindjic's death, had appointed Deputy Prime Minister Nebojsa Covic as acting prime minister, Reuters reported.

Covic appeared on television and said: "The assassination of the prime minister of Serbia, Zoran Djindjic, was a criminal act by those who want to disrupt reforms in Serbia."

News of Djindjic's death swept across the Serbian capital. "Is he really dead? God forbid! Whatever happened to this country. Can we feel safe?," 65-year-old pensioner Ljiljana told Reuters.

"This is scary, frightening. Does this mean even I now have to watch my back?" said Marjana, a 35-year-old bank clerk.

President Stjepan Mesic of Croatia, which fought Yugoslav troops in its struggle for independence, described the killing as "an act of madness."

Djindjic had put himself out on a limb to meet Western demands for aid by handing over other suspected war criminals such as Milosevic to the Hague. His reformist pro-Western stance drew opposition from Serb nationalists and created many enemies.

Last month, he appeared to have been targeted when a truck suddenly cut into the lane in which his motorcade was traveling to Belgrade's airport.

Media reports in Belgrade said police believed the incident was an attempt to kill him. Djindjic had initially dismissed the incident as a case of "careless driving."

CNN's Chief International Correspondent Christiane Amanpour said on Wednesday: "This is a very, very severe blow to all those in the international community trying to engage with Serbia."

She added that Djindjic, who was married with three children, was "aware of his own vulnerability. He has talked many times of threats to his own life."

Amanpour said he had been an "emblem of democracy ... he has played a key and dramatic role in bringing his country into the democratic world ... a courageous man."

Serbia, which has a population of 10.5 million, is one of the two republics in the nation of Serbia and Montenegro, previously called Yugoslavia.

They had been the only two republics remaining in Yugoslavia after the six-member socialist federation collapsed in the 1990s.

Yugoslavia -- first formed in 1918 -- started unraveling along ethnic lines in the early 1990s. Slovenia, Croatia and Bosnia-Herzegovina seceded in a series of ethnic wars, while Macedonia separated peacefully, leaving only Serbia and Montenegro together. The name was officially changed from Yugoslavia last month.