A sniper holding a woman hostage fired repeated volleys from a .30-cal. M1 carbine from a downtown skyscraper last night, slightly wounding one person, police said.

Police and special tactical units converged on the area as hundreds of spectators sought cover in doorways up and down Market Street. The shooting began at 5:29 p.m. in the midst of the evening rush hour. He was still firing sporadically three hours later.

The sniper was on a broad ledge outside the 16th floor executive offices of the state Unemployment Compensation Department, the main tenant of a building at 9th and Market Street, about three blocks from City Hall, police said.

Police said the sniper was a "member of a radical group" and described him as a "20-to-30-year-old white Latino male," wearing green fatigues and a grenade belt. [Later reports said the man identified himself as a member of the Symbionese Liberation Army.]

Police spokesman Henry Friedlander said the hostage was a secretary from the building.

Firemen entered the building with special anti-smoke breathing equipment, sparking reports that they intended to use tear gas to flush the sniper out.

Authorities also reported that the route of a planned motorcade by former president Gerald R. Ford was diverted from the downtown area to avoid the police-sniper confrontation. Ford was to speak in San Francisco at a Republican fund-raising dinner.

About three dozen people, protected by the building's overhang, were pinned down, unable to move along Market Street without getting into the line of fire.

Spent cartridge cases, remnants of the more than 30 shots, fired in apparently random directions, rained down on police and bystanders.

Police negotiators said they had established communications with the sniper. The negotiators were joined by Mayor Dianne Feinstein and District Attorney Joseph Freitas.