An all-night art show in New Jersey, created to stop violence in the city became bloody when gunfire erupted between rival neighbourhood gangs, leaving one man dead and 22 others injured during a gunfire discharge on Sunday morning.

Mercer County Prosecutor Angelo Onofri said police responding to a gunfight involving multiple suspects about 2:45 a.m. at the Art All Night event in Trenton shot and killed one of the alleged gunmen and another suspected gunman is in critical condition.

Of the 22 people injured, 17 were struck by gunfire, including a 13-year-old boy. Onofri said the gunfire erupted inside the old Roebling Wireworks building, where the art festival was being held.  "Prior to the shooting there were numerous physical altercations that took place inside and outside of the venue," Onofri said.

Due to the fighting, the Trenton Police Department had ordered organizers to shut down the event. "Police began dispersing individuals. Those individuals, however, continued to loiter and additional fights broke out, and then the shooting occurred" he said.

Onofri identified Tahij Wells, 33, as the alleged gunman who was killed by police. He said Wells had been released from prison in February after serving a sentence on homicide-related charges. He also identified Amir Armstrong, 23, as another suspect involved in the shootout. Armstrong was wounded and in critical condition.

He said police believe at least three men, possibly more, opened fire inside the venue where hundreds of people were attending the art festival. He said that when the shooting broke out, people ran in all directions seeking cover.

As of Sunday evening, only one suspect, Armstrong, was in custody on weapons charges in the hospital.

The prosecutor said multiple weapons were recovered inside the venue, including a handgun that had an extended capacity magazine, "meaning that it contained more ammunition than is permitted under New Jersey law."