STOCKHOLM, Feb. 28, 1986 (UPI) - Prime Minister Olof Palme was assassinated Friday night on a snow-covered street a mile from his home by at least two shots fired at close range minutes after he left a movie theater with his wife.
Police declared a national alert in a search for the killer or killers and suggested a Croatian separatist group might have plotted the assassination of the 59-year-old socialist.
Police questioned about 10 people on the street where Palme was slain. But Stockholm Police Superintendnent Nils Linder said, ''We don't know whether it was one or several persons who shot the prime minister and we have no descriptions of their looks.''
''None of those who we have questioned so far have really seen the actual event and therefore have not seen who shot Olof Palme. This means we don't know what we're looking for or where to look,'' Linder said.
Some 30 police patrol cars and buses massed in central Stockholm minutes after the assassination -- the first of a major Swedish government official since King Gustav III was shot and killed in 1792 during a masquerade ball a few blocks from where Palme was gunned down. As is customary in Sweden, Palme had no bodyguard.
''I refuse to believe it is a political assassination,'' said former prime minister Thorbjorn Falldin. ''This must be the work of a lunatic.''
Police stepped up patrols at airports, ferry stations and all other border crossings and set up checkpoints at city exits, stopping cars to look for suspects.
The police alert to the nation's law enforcement agencies mentioned Ustashi, a group seeking independence for the Yugoslavian state of Croatia.
A police spokesman later said investigators had no evidence that Ustashi was involved. ''We have no indications that any political organization carried out the killing,'' the spokesman said.
A Croatian separatist named Miro Baresic is jailed in Sweden for the April 7, 1971, assassination of Vladimir Rolovic, then Yugoslavia's ambassador to Sweden. The government has commuted Baresic's sentence and planned to release him in about two years.
Palme was shot about 15 minutes after he and his wife Lisbeth left a movie theater showing a Swedish film titled ''The Brothers Mozart.'' A bullet grazed Mrs. Palme's back but she was not seriously hurt, police said.
At about 11:30 p.m., the couple stepped from narrow Tunnelgaten street a few blocks from the theater onto the Sveavagen, one of Stockholm's major avenues, when Palme was shot at least twice, once in the chest and once in the abdomen from just a few yards away, police said.
Police said the chest wound killed Palme, who was prime minister from 1969 to 1976 and was re-elected to a second term in 1986.
A taxi driver, Anders Delsborn, 27, reported the shooting to the taxi agency's central switchboard.
''I heard him shout, 'Somebody has been shot! Immediately call ambulance and police!''' switchboard operator Ann Louise Paulsson said. ''I then asked if I understood him correctly. Anders replied, 'I'm sure he is. He's lying down and he's not moving any more.'''
Police, alerted by Paulsson, found Palme's body in a puddle of blood on a snow-covered sidewalk. Palme and his wife were taken to nearby Sabbatsberg Hospital, where the prime minister died at 12:06 a.m. Saturday, police said.
Mrs. Palme left the hospital at 2:30 a.m. and went home to the couple's apartment in Stockholm's Old Town, about a mile from where her husband was killed. Police sealed off the area surrounding the home.
Vice Premier Ingear Carlsfon took over as acting prime minister and called leading government officials into an emergency meeting. The nation plunged into mourning, with Swedish radio suspending regular programming to play somber classical music.
Authorities cordoned off the intersection where Palme was killed. Dozens of people gathered behind the cordons, looking at the puddle of blood only a couple yards away. A torch was lighted in Palme's memory.
President Reagan issued a statement expressing his ''profound'' sorrow over Palme's death.
''Olaf Palme was one of the world's most respected leaders, a man who made compassion the hallmark of Swedish policy,'' Reagan said. ''The world will remember him for his devotion to democratic values and his untiring efforts to promote peace.''