UPDATE 1-Gunman opens fire at Japanese gym, kills two

(Adds details)

TOKYO, Dec 14 (Reuters) - A gunman in a camouflage suit burst into a Japanese sports gym on Friday night, firing wildly and killing a 26-year-old woman swimming instructor, one man and wounding at least three children, Japanese media reported.

Shootings are rare in Japan, but the government has cracked down on gun ownership after a recent spate of incidents.

The media reports said the masked gunman burst into the sports club, above a supermarket, as a swimming class was taking place just after 7 p.m. (1000 GMT).

He walked through the gym lobby firing a shotgun, moved into the office and shot the instructor. He kept firing near a pool where children were taking a swimming class, media and the president of the gym chain said.

The gunman holed up in the gym for a time before escaping, broadcaster NHK said. It said police were searching for the man.

A critically wounded man later died in hospital after the attack on the Renaissance sports club in Sasebo city, Nagasaki prefecture, the media reports said.

Among those wounded were two girls aged 9 and 10 who suffered leg injuries, media said. Television pictures showed children wrapped in towels being evacuated from the building.

The president of the Renaissance gymnasium chain, Toshikazu Saito, told a media briefing he had no idea why his club had been targeted.

The splitting of a criminal gang into rival factions has been blamed for a number of shootings in southern Japan this year, although it was not immediately clear if Friday's shooting was related. Police declined comment. (Reporting by Rodney Joyce and Isabel Reynolds; Editing by Grant McCool)