Four people including a suspected gunman were found dead Saturday inside a home in Aurora, Colorado, following a hostage situation, according to local reports.

Police entered the townhome at about 9 a.m. local time (1800 GMT) and killed the suspected gunman, during exchange of fire after hours of failed negotiations, the local media reported.

Police survey the outside of a townhouse complex following an overnight hostage-taking incident in Aurora, Colorado Jan 5, 2013. [Photo: Agencies]

Several nearby homes were evacuated at around 3 a.m. local time (1200 GMT) for safety reasons.

One person inside the barricade home was able to escape by jumping out a second-story window and alerted authorities.

The motivation of the suspect is under investigation, police said.

Local media report said the gunman shot dead three people, but whether the gunman was shot dead by police or he killed himself remain unclear so far.

A mass shooting in one of Aurora's theaters killed 12 people and injured 58 others on July 20, 2012. The sole suspect, James Eagan Holmes, was charged with 24 counts of first degree murder and 116 counts of attempted murder. He will return to court Monday for a hearing.