"The Royal Oman Police have responded to a shooting incident that occurred in the vicinity of a mosque in the Al-Wadi Al-Kabir area," police said in a statement.
The force gave an initial toll of four killed and "several others" wounded at the mosque in eastern Muscat.
Such an attack is rare in the Sultanate, which has regularly played the role of mediator in regional conflicts.
The United States embassy in Muscat issued a security alert following the shooting and cancelled all visa appointments Tuesday.
"US citizens should remain vigilant, monitor local news and heed directions of local authorities," the embassy wrote on social media platform X.
Footage verified by AFP shows people fleeing near Imam Ali Mosque, its minaret visible, as gunshots ring out.
A voice can be heard saying "oh God" and repeating "oh Hussein", referring to the imam who Shiites view as the rightful successor to the Prophet Mohammed.
Shiites this week mark Ashura, an annual day of mourning that commemorates the 7th-century battlefield martyrdom of Hussein.
Police said that "all necessary security measures and procedures have been taken to handle the situation" in their statement.
"The authorities are continuing to gather evidence and conduct investigations to uncover the circumstances surrounding the incident," the force said on X.
