A shooting incident at an all-night art festival in New Jersey has left one suspect dead and 20 people injured, a local prosecutor said.

Many of the 20 injured were treated for gunshot wounds, Mercer County Prosecutor Angelo Onofri said Sunday morning.

Four of those, including a 13-year-old boy, were in critical condition.

He said that two suspects opened fire around 2:45am local time during the Art All Night festival in Trenton that showcases local art, music, food and films.

One of the suspects, a 33-year-old man, was killed. Another suspect is in custody.

Authorities say that about 1,000 people were in the area when the shooting started.

Trenton resident Angelo Nicolo told Philadelphia 6ABC-TV that he and his brother were at the event when they heard loud popping sounds.

He said people started running down the street.

"I saw two police officers escort a guy that got shot in the leg. They bandaged him up and whisked him away," Mr Nicolo said