The teenager wanted in connection with the Boston Marathon bomb attacks remains at large but gunshots have been heard in the suburb of Watertown.
Dzhokhar Tsarnaev, 19, escaped on foot early on Friday after a shootout with police that claimed the life of another suspect, his elder brother.
A stay-indoors order for the Boston area has been lifted and Massachusetts' mass transit system has reopened.
Three people died and more than 170 were hurt in Monday's bomb attacks.
On Friday evening, Col Timothy Alben of the Massachusetts State Police told a news conference that investigators believed the suspect had not left Massachusetts, but they could not be sure he was still in Boston.
Col Alben said 20 streets had been searched door-to-door in the suburb of Watertown, but no trace of the suspect had been found.
"We do not have an apprehension of our suspect this afternoon but we will have one," he said. "We are committed to this."
But shortly after the conference, gunfire was heard and police cars and armoured vehicles began converging on Watertown.
Massachusetts Governor Deval Patrick had told the press conference an order to stay indoors would be lifted across the whole of Boston and surrounding suburbs, while the state's mass transit system would reopen.
But later there were requests for Watertown residents to stay indoors.
Nineteen-year-old college student Dzhokhar Tsarnaev escaped after a shootout in which his elder brother, 26-year-old Tamerlan Tsarnaev, died early on Friday.
Both are said to be of Chechen origin, and are reported to have moved to the United States about 10 years ago.
The manhunt began late on Thursday, hours after the FBI released images of the two men they were hunting in relation to the bombings.
University police officer Sean Collier, 26, was killed on the Massachusetts Institute of Technology (MIT) campus.
Two men then carjacked a vehicle at gunpoint with the driver still in the car. They later released the man unharmed.
Police chased the suspects, who threw bombs and exchanged gunfire with police, seriously wounding one officer.
In Watertown, officers and the men were involved in a gun battle lasting 10 minutes, according to witnesses.
A warning to stay indoors was later extended to the whole of Boston, in what correspondents said was an unprecedented move.
Meanwhile, President Barack Obama was briefed on developments in the manhunt and investigation for about an hour in the White House Situation Room.
US Secretary of State John Kerry, also at the briefing on video link, said the authorities were "part of the way there" in bringing the Boston terror suspects to justice, AP reported.
Dr Richard Wolfe, of the Beth Israel Deaconess Medical Center, said an individual had been brought in with multiple blast and gunshot wounds to his upper body.
He was in cardiac arrest when he arrived at hospital and despite attempts to resuscitate him, he was pronounced dead at 01:35 (05:35 GMT), Dr Wolfe said.
The authorities were investigating whether the dead man had a home-made bomb strapped to his body when he was killed, according to reports.
Boston police Commissioner Ed Davis said he believed the man being hunted in the Watertown area was a "terrorist".
"We believe this to be a man who came here to kill people," he said.
A grey Honda CRV vehicle, which reports said had been sought in connection with the suspects, was found on Friday morning in the Boston area, Connecticut police said.
The father of Dzhokhar Tsarnaev said his son was a second-year medical student in the US and was hoping to be a brain surgeon.
But Anzor Tsarnaev told the BBC he believed the secret services had framed his sons.
"It was a terrorist attack carefully organised by secret services - I don't know which ones. My son used to go to a mosque, so they once paid us a visit to ask why he is doing that.
"Yes, there was such an episode. So they put all the blame on him and shot him. That's it."
Ruslan Tsarni, an uncle of the suspects who lives in Maryland, said he was "ashamed" of their alleged involvement in the bombings.
He urged Dzhokhar Tsarnaev to "turn himself in".
Asked what the bombers' motives may have been, he replied: "Being losers, hating everyone around them."
Meanwhile, investigators removed a computer and other evidence from the New Jersey home of the Tsarnaev brothers' sister, police said.
Ailina Tsarnaeva, who lives in the town of West New York, is said to have told FBI agents she had had no contact with her brothers for a long time.
Monday's attack on the Boston Marathon killed Martin Richard, aged eight, Krystle Campbell, 29, and Lu Lingzi, 23, a postgraduate student from China.