Aug. 25, 2012 -- All nine people wounded in an incident when a man gunned down an aquaintance outside the Empire State Building and then was killed by cops were hit by police gunfire, New York Police Department Commissioner Raymond Kelly confirmed today.

The victims, who Kelly said were all hit either by bullets or "fragments" of bullets fired by police, sustained non-life threatening injuries. Two remain hospitalized, while a third was held overnight for observation due to elevated blood pressure, according to the NYPD.

Police said Jeffrey Johnson shot Steven Ercolino, a former co-worker, on Friday and then stood over his prone body, pumping more bullets into him.

Two NYPD officers, who each has 15 years on the force and no prior shootings, encountered Johnson, 58, a half block from where he shot Ercolino in front of the Empire State Building.

The dramatic and deadly confrontation was captured on surveillance video that was released today by the NYPD.

Johnson can be seen on the surveillance video pointing his gun at officers, who were eight feet away.

The officers fired 16 times, producing 10 bullet holes on the gunman's body.

Johnson had two live rounds in his .45 calibre semi-automatic pistol when he was shot, police said. They initially believed the gun had misfired, however Commissioner Raymond Kelly said investigators have examined the weapon and concluded Johnson did not try to fire on police.

Bystanders caught in between the gunman and a spray of bullets were injured by a combination of richochets and bullet fragments, police said.

Witness George King told ABC News he watched several people around him struck by bullets.

"I heard multiple gunshots, I'd say about 12 of them," he said. "I thought they were firecrackers, at first. I didn't know what was going on. Everyone started running for cover along with me. The girl that was running next to me fell down to the pavement and, when I looked at her, I could see she had been hit in the leg. She was bleeding from the leg.

"I noticed about five people who had been struck on the sidewalk or the street," he said.

Both officers have been assigned to administrative duties while a standard shooting review is conducted.

The saga unfolded shortly after 9 a.m. on Friday in New York's bustling Midtown area and stemmed from a feud Johnson had with a former co-worker.

Johnson was seen lurking outside a building adjacent to the Empire State Building, ABC News station WABC-TV in New York reported.

The building housed Hazan Imports Corp., which had once contracted with Johnson to design T-shirts, police told WABC.

Johnson's relationship with the company ended bitterly a year ago in a dispute with the company's account executive, Steven Ercolino, 41, police said.

A friend of Ercolino's who witnessed the shooting told police that she noticed Johnson, who was wearing a suit and carrying a black bag, outside the building. She saw him walk up to Ercolino and without saying a word, fire five times at the victim and keep firing as Ercolino slumped to the ground, police told WABC.

Ercolino's father said he was heartbroken.

"Steven was a wonderful son. He was very good son and person," Frank Ercolino of Warwick, N.Y., told ABC News.

Police told WABC that Johnson legally bought his gun in Sarasota, Fla., in 1991. He illegally brought it to New York City, which has strict gun laws.