Police cordoned off the centre of a village yesterday after reports of gunshots in the early hours.
About a dozen officers, some with sniffer dogs, were called to Thrussington, near Syston, at 4.20am.
The Green was cordoned off while a scenes of crime officer placed four numbered markers in the road and took photographs.
The sound of gunfire was said to have been reported by a woman who runs a business in the village.
A villager, who asked not to be named, said: "She told us she was woken at about 4.30am by noise and commotion outside and heard what she thought was gunshots."
Another villager said: "She said she saw flashes and that there was a crowd of Asian lads talking and shouting, then she saw someone's hand go into a vehicle."
Nicole Richardson, whose family run The Star Inn, in The Green, said: "I don't know what to think.
"Thrussington isn't the kind of village where you would expect this kind of thing.
"The police are obviously taking very seriously what happened, but at the moment there's just a lot of speculation."
Eric Feasey, 59, whose home overlooks the scene, said: "I was woken at 5am.
"I looked out of the bedroom window and there were a lot of police about and one officer going up Regent Street with a sniffer dog."
Marie Brocksopp, owner of Ginger's Hair and Beauty Studio, in The Green, said: "It shook me up a bit coming to work this morning. I had to find another way to the shop. I've had to postpone my appointments, at the request of the police."
Police said last night their investigation was continuing. The force has not said whether a gun was fired.
June Marsh, breakfast chef at The Star Inn, said: "We were told there was an incident outside involving some people in a car and that two shots were fired.
"One of our guests said it sounded like car doors slamming.
"He is ex-military and said he would have recognised the sound of gunshots."
Another villager, who asked not to be named, said: "It sounded to me more like a car door shutting.
"I've lived in the countryside all my life and I think I would know the sound of a gun firing."
The police cordon was lifted at 8.30am, but an hour later was put back in place and extended as far as Hoby Road.
Fourteen specialist search officers from the tactical support group carried out a detailed search.
Where the markers had been placed, there were traces of what looked liked like dried blood.
A police spokeswoman said: "At 4.20am, we received a report of gunshots in an area near The Green.
"A vehicle with a number of occupants was driven away from the scene.
"Our inquiries are in their early stages. At the moment there are no reports of anyone being injured."
She said the cordon was replaced because "it is very much a live investigation and things keep changing".
Police carried out an armed raid on a house in Ratcliffe Road, Thrussington last night.
At the time of going to press, the force would not give any further information about what had happened.