A gunman with known psychiatric and drug problems opened fire in a village in southern Switzerland on Thursday, killing three women and injuring two men, authorities said.

The shooting raised questions about relatively liberal gun ownership laws in Switzerland, where citizens are allowed to keep their weapons at home outside periods of mandatory military service.

The 33-year-old man opened fire on Wednesday at 8:50 pm (1950 GMT) on the streets of the small village of Daillon near the southwestern city of Sion, said Robert Steiner, police commander in the local canton of Valais.

He used two weapons: a historic Swiss military rifle known as a mousqueton and a hunting rifle. Earlier reports had suggested he used an assault rifle.

The man fired around 20 shots, instantly killing three women aged 32, 54 and 79, officials said, and injuring two men, aged 33 and 63, who were taken to hospital.

The gunman was wounded during an exchange of gunfire while being apprehended by police and also taken to a hospital.

Officials said the gunman, whom police did not identify, had spent time in a psychiatric hospital in 2005 and was known to police as a drug user. Police had previously confiscated weapons when he was placed in a psychiatric ward.

His motives for the shooting were not known, but officials said he was a resident of the village and had known his victims.

Forensic investigators were at work Thursday in the picturesque village of 200 residents, which is perched at an altitude of 1,000 metres (3,280 feet) and surrounded by vineyards.

Police said in an earlier statement they had responded after being called about the shooting and told that "several injured people are lying on the ground".

Police "immediately intervened and neutralised the suspect," the statement said.

Swiss media quoted local residents as saying the gunman had been drinking heavily before the shooting.

Resident Marie-Paule Udry told news website 20Minutes.ch the man had been in a local restaurant prior to the shooting, adding: "He had drunk a lot."

Cantonal police spokesman Jean-Marie Bornet told AFP that police had only returned fire after coming under threat.

"There was an exchange of gunfire because he was threatening police officers. He was hit and wounded," Bornet said, adding that no police officers were injured.

"There is bewilderment and shock in Valais. This is a man who lived in Daillon and opened fire on his neighbours," Bornet told RSR Swiss radio.

Gun ownership is widespread in Switzerland, where the law allows any citizen aged over 18 to possess arms under certain conditions.

The defence ministry says there are some two million weapons in private hands among Switzerland's about eight million inhabitants.