32 MASSACRED IN TASMANIA.

Byline: Rick Rycroft Associated Press 

A gunman slaughtered at least 32 people at a popular tourist site and nearby pub Sunday. Police captured him today when he bolted in flames from a guest cottage, which he had torched with three hostages inside.

The gunman, whom police identified as a 29-year-old with a history of psychological problems, had opened fire with an semiautomatic rifle Sunday afternoon on tourists at an colonial prison site on the island of Tasmania.

It was the worst shooting massacre in Australia this century.

``Various massacres would pale into insignificance when you look at what has happened in Tasmania,'' said Tasmanian Police Commissioner John Johnson.

Police indicated they expected to find the bodies of three more victims inside the inn - the couple who owned it, and a man whose car the killer commandeered.

Witnesses said the blond man drove up to the prison in a Volkswagen with a surfboard on top and talked casually with some of the 500 people outside.

Then he walked into a cafe, pulled a semiautomatic rifle from a tennis bag, and started shooting.

``He wasn't going bang-bang-bang-bang - it was `bang' and then he'd pick someone else out and line them up and shoot them,'' witness Phillip Milburn told Australian Broadcasting Corp. radio.

The gunman moved on to a local pub, shooting and killing more people, before fleeing to the nearby Seascape bed-and-breakfast cottage about 5 p.m. Sunday. By early today, more than 200 local and special police units had surrounded the guest house.

The arrest came after police had tried to negotiate by phone with the gunman, who fired at them with two heavy-caliber military-type rifles and set the cottage on fire. Flames finally drove him from the cottage.

``His clothing was on fire, and he started taking his clothing off,'' said police Superintendent Bob Fielding.

The Age newspaper of Melbourne identified the hostages as David and Sally Martin, the guest house owners.

Exploding ammunition in the burning house prevented officers from rapidly searching it to learn the fate of the hostages. ``It doesn't look very good,'' Fielding said.

Most of those killed were Australians, but the dead included two Malaysians and an Indian. An infant also was slain, as well as two sisters, ages 3 and 6, and their mother. No names were available. Earlier reports that two Canadians were killed could not be verified.

One American and two Canadians were among 18 people injured. Police said only that the American man, from the state of Washington, was not badly hurt.

One Melbourne woman told Australian Associated Press she survived by hiding under a table at the cafe.

``There were people just sitting there in their chairs where they'd been eating - dead,'' she said. ``There was a weird sort of calm, as if no one could believe what they were seeing.''

The gunman left ``shooting as he went, shooting everybody he could see,'' said Wendy Scurr, who worked at the front desk at the historic site. She ``ran for my life along with hundreds of other people at the site.''

The man kept shooting outside the cafe, firing at screaming tourists trying to flee.

The gunman next shot at two buses, killing several tourists in each and one driver. He fired on cars approaching the gates to the site.

``The guy that we were with had to go and help take a stretcher in,'' witness Karen Jones told Australian radio, ``and the mother was saying, `You have to get my baby to the hospital, quick, quick.' But it was already dead.''

The old Port Arthur prison colony is on the Tasman Peninsula, connected to Tasmania's mainland by one road on a narrow isthmus. Police closed off the road into Port Arthur, the landing site of some of the toughest convicts England sent into Australian exile in the 1800s.

The prison complex is Tasmania's most popular tourist attraction after the island's parks and wilderness areas. Its neat green lawns surround the ivy-covered remains of a Gothic church and the crumbling sandstone ruins of the old penitentiary, where 30,000 repeat offenders, political prisoners and highly dangerous convicts were sent from 1830 to 1877.

The site's dark history provided an ironic backdrop for Sunday's shootings. Until now, the deadliest crime was committed by Frank Vitkovic, who in 1987 slaughtered eight people in Melbourne before leaping to his death from a high-rise building.

State gun laws vary in Australia, but it is fairly easy for a person without a criminal record to buy a rifle or shotgun. Pistols are less commonly owned.

Tasmania has one of the most lax gun laws in the nation. Until recent law changes, almost anyone could buy any kind of weapon - even a machine gun.