They later blew up the car near the entrance to a busy metro station. Witnesses said it was a miracle no one was killed or injured by the bomb that left the car in small pieces on the busy Marques de Salamanca roundabout, outside the headquarters of Spain's National Industry Institute (INI), the state holding company.
Police said the shooting and the car bomb bore the hallmarks of the Basque group, said to be increasingly cornered and faced with mounting opposition in the Basque Country where they once had widespread support. The gunmen used 9mm pistols of the type favoured by Eta, and the blowing-up of the car was seen as Eta's method of destroying evidence while distracting police and wreaking further havoc.
Basque and Spanish authorities believe Eta and its political wing, Herri Batasuna, are split between those seeking a face-saving way out of the circle of violence and younger members for whom intimidation, violence and extortion have became a way of life that has little to do with independence any more. The former are seeking dialogue with the Madrid government, but yesterday's attack, coupled with the continued holding of a Basque businessman, Julio Iglesias Zamora, kidnapped in July, showed that the younger radicals can still hit the state where it hurts.
In a pre-scheduled public appearance shortly after the shooting, King Juan Carlos spoke of his 'profound distress and emotion at these cowardly terrorist actions'. Asked whether the government would negotiate with Eta, a visibly-angered Defence Minister, Julian Garcia Vargas, visiting the wounded driver in hospital, used an old military term: 'Ni agua'. (To the enemy, not even a drop of water).
General Herrero, who had walked the 20 yards from his flat at 101 Hermosillo Street to his armour- plated saloon car on the double junction with Alcala Avenue and Alcantara Street when the gunmen struck shortly after 8.30am, was the eighth person killed by the insurgents in Madrid this year, the 86th in the capital in the last 10 years and around the 800th overall in three decades of Eta attacks aimed at winning Basque independence.
In June this year, six soldiers and a civilian were blown up by a car bomb a few blocks from where yesterday's car blew up. The worst attack in Madrid was in July 1986, when a car bomb killed 12 members of the Guardia Civil.
Police were unsure whether the car was blown up outside the INI headquarters yesterday because the latter was a public building, or simply to allow the assassins a quick escape down the nearby steps of the Juan Bravo metro station. Whatever the case, shortly before 9am on one of Madrid's busiest intersections, the fact that the blast injured no one was greeted with astonishment and relief by passers-by.
Interior Ministry sources said the assassins may have been from Eta's 'Madrid commando', one of only three or four cells still thought to be operational in Spain. The sources said General Herrero, 63, may have been targeted because sophisticated air force planes, with heat-seeking devices, had been used in the search for Mr Iglesias Zamora in the rolling hills between the Basque Country and the Navarra region.
The authorities were thought to be closing in on Mr Iglesias Zamora's place of captivity over the last few days, creating controversy in the Basque Country over whether they should move in or ease off to allow the kidnappers to flee and ensure the prisoner's life. The Basques' de facto political leader, Xabier Arzalluz, suggested the security forces back off. The kidnapping in July led to unprecedented anti-Eta street protests.
Shortly before the Madrid shooting, a Frenchman was injured in the French Basque Country when a home-made bomb exploded in his car in the town of Bidart. Police were investigating whether the man had been a victim or on his way to place the device.