Fugitive former cop Christopher Dorner, who barricaded himself inside a remote mountain cabin near Big Bear, Calif., after a shootout with police, is believed to be dead, sources have confirmed to ABC News.

During the intense standoff with authorities, the cabin became engulfed in flames. Smoke was seen coming from the cabin shortly before 4:30 p.m. PT, and a fire had been reported to authorities.

Dorner, a former Navy marksman wanted for allegedly murdering a police officer and suspected in the deaths of two other people earlier this month, engaged in a gunfight with two San Bernardino County Sheriff's deputies who had pursued him.

The two were airlifted to a nearby hospital, where one died, police said.

Dozens of local, state and federal authorities were at the scene in the San Bernardino Mountains. Dorner had sworn to kill police and their family members in a manifesto discovered online last week.

The search for Dorner, one of the largest manhunts in recent memory, culminated in a call to police Tuesday afternoon that a suspect resembling Dorner had broken into a nearby home, taken hostages and stolen a car.

Police said the former cop, believed to be heavily armed and extremely dangerous, took two women hostage before stealing a car just after noon local time Tuesday, police said.

The two hostages, who were tied up by Dorner but later escaped, were evaluated by paramedics and were determined to be uninjured.

Officials say Dorner crashed the stolen vehicle and fled on foot to the cabin, where he barricaded himself and exchanged fire with deputies from the San Bernardino Sheriff's Office and state Fish and Game officers.

Police sealed all roads going into the area and imposed a no-fly zone above the cabin, nestled in a wooded area that has received several inches of snow in recent days.

Four Big Bear-area schools were briefly placed on lockdown.

The San Bernardino County Sheriff's Department stopped all traffic leaving the area and thoroughly searched vehicles, as SWAT team and tactical units could be seen driving toward the cabin, their sirens blaring.

Dorner faces capital murder charges that involve the killing of Riverside police officer Michael Crain, who was gunned down in an ambush last Thursday.

A capital murder charge could result in the death penalty if Dorner is captured alive and convicted.

The charges do not involve the slayings of Monica Quan and her fiance, who were found shot to death Feb. 3. Quan was the daughter of former LAPD Capt. Randal Quan, who was mentioned as a target of Dorner's fury in his so-called manifesto, which he posted on his Facebook page.

In the 6,000-word manifesto, Dorner outlined his anger at the Los Angeles Police Department for firing him, and made threats against individuals he believed were responsible for ending his career with the police force five years ago.

Dorner was fired after filing what the LAPD determined to be a false report accusing other cops of brutality.

The LAPD had assigned 50 protection details to guard officers and their families who were deemed possible targets.