According to the Associated Press, the shooting happened around 9 p.m. and witnesses reportedly spotted the attackers fleeing the square on bicycles.
The attack occurred just minutes after the explosion of a bomb placed under a car in another district in Malmo, destroying the vehicle and damaging nearby cars. No injuries have been reported and police have not confirmed if the incidents were connected.
Katrin Stjernfeldt Jammeh, chairwoman of local municipality council, told Sweden's SVT that she was concerned Saturday's events would lead to an escalation of the violence seen in recent years in the Malmo.
"It is every parent's nightmare to lose a child. It's been a heavy and black night in Malmo," Stjernfeldt Jammeh said, adding that similar events are said by police to be gang-related.
Ulf Kristersson, leader of the opposition Moderate Party, called for governing Social Democrat Prime Minister Stefan Lofven to act to solve the violence which has plagued Malmo in recent years.