Witnesses have spoken of the frightening and chaotic scenes that unfolded when a car hit a school bus and shots were fired during a police pursuit in Geelong.

Two people were arrested after the incident, which Victoria Police said began late Thursday afternoon when a Kia – allegedly stolen from NSW – was spotted by a police helicopter near a busy intersection in the suburb of Newtown.

“Officers attempted to intercept the vehicle before it allegedly reversed into a school bus in an attempt to flee,” they said.

The bus passengers, believed to be aged from Year 7 to 12, were not injured.

However, screams and wails from the children can be heard in a widely shared video that shows the Kia hitting the bus on busy Latrobe Terrace.

Footage also shows a police officer step out from behind a fence as the car drives on, and what sound like gunshots can be heard.

In one video, a voice urges everyone on the bus to “get down, get down”. Other mobile phone footage shared on Friday afternoon shows the ensuing chase outside the front window, with the bus driver urging students to stay in their seats and a boy saying: “Oh my god, that was so scary.”

Victoria Police confirmed that officers shot at the car.

“The Kia is alleged to have driven at officers, who have discharged their firearm, before it collided with another vehicle,” a spokesperson said.

One witness described the incident to local media as “frightening” and “chaotic”.

“We heard what sounded like gunshots,” the woman, named only as Lisa, told the Geelong Advertiser.

“There were at least 10 cop cars, choppers overhead. It didn’t seem real.”

Victoria Police said the car’s occupants, a 37-year-old man and a 43-year-old woman, ran away but were arrested shortly afterwards. Both were taken to hospital under police guard, the man with a non-life-threatening gunshot wound to his arm and the woman with minor injuries.

The woman has since been charged with handling stolen goods and bailed to appear at Geelong Magistrates’ Court on March 31.

The female driver of another vehicle that was allegedly hit by the Kia had minor injuries and was also taken to hospital.

A witness waiting at traffic lights in a street adjacent to the incident said he saw the Kia “fly over the footpath”.

“It took out a traffic light, just flattened it, and then hit another car in the middle of the intersection,” Anthony Baric told The Age.

Baric said a friend of his daughter had been on the school bus and filmed the accident: “You can hear the fear in the kids on the bus – they were petrified.”

Other witnesses reported being shocked and ducking for cover when they heard gunshots.

Western Region acting commander Melissa Webbers acknowledged the incident would have been “absolutely terrifying” for anybody who saw it unfold, “let alone for the many school kids who were all on their first day today”.

“I’m really dismayed to see such violent and reckless behaviour exhibited by this offender who put our community at risk, who put our police at risk, and we are really fortunate today that none of our community and none of our police have been injured in this incident,” she told reporters.

Police said Armed Crime Squad detectives will investigate the incident with Professional Standards Command oversight, which is standard practice when a police firearm is discharged.

Witnesses with footage or information are urged to contact Crime Stoppers on 1800 333 000 or crimestoppersvic.com.au.