Two people died and 12 others were wounded in France when a man flagged as a possible extremist sprayed gunfire near the city of Strasbourg’s famous Christmas market Tuesday, sparking a search for the suspect and French officials to put the country on increased alert for terror attacks.

French prosecutors said a terrorism investigation was opened, though authorities did not say what they thought to be a motive. Strasbourg is home to the European Parliament, one of several places locked down after the shooting and those inside prevented from leaving.

It was unclear if the market — the nucleus of an al-Qaida-linked plot in 2000 — was the intended target. The alleged assailant got inside a security zone around the venue and opened fire from there, Mayor Roland Ries said on BFM television.

Two years ago, a Tunisian man drove a hijacked truck into a busy Berlin Christmas market, an attack that killed 12 people. Strasbourg, which promotes itself as the “Capital of Christmas,” is located on France’s border with Germany, about 500 kilometres east of Paris.

Authorities said they identified the suspect in Tuesday’s bloodshed and he had a criminal record. The prefect of the Strasbourg region said the alleged shooter also was on a watch list of potentially radicalised individuals. No other details about him were disclosed.

Gendarmes went to the suspect’s home to arrest him before the attack, but he wasn’t there, Stephane Morisse of police union FGP said. They found explosive materials during a search, he said.

France, where most of Europe’s worst terror attacks of recent years took place, is raising its terror alert level and sending security reinforcements to Strasbourg, Interior Minister Christophe Castaner said early Wednesday.

Some 350 security forces and two helicopters were involved in the search for the alleged assailant, who had been radicalised for “several years” and confronted law enforcement officers twice while he “sowed terror” in Strasbourg, Castaner said.

The death toll stood at two on Wednesday, he said. Two police union officials said earlier there were four victims. Officials did not explain the conflicting numbers.

A dozen more people were wounded, half of them who were in “absolute emergency” critical condition, Castaner said. The alleged shooter was shot and wounded as well, by soldiers guarding the Christmas market, according to Stephane Morisse of police union FGP.

French military spokesman Col. Patrik Steiger said the shooter didn’t seem to be aiming for the soldiers patrolling in and around the market, but appeared to target civilians instead.

Witnesses described hearing gunshots, screams and the shouts of police officers ordering people to stay indoors before the area fell silent and the officers fanned out.

“I heard two or three shots at around 7:55 pm, then I heard screams. I got close to the window. I saw people running. After that I closed the shutters. Then I heard more shots, closer this time,” Yoann Bazard, 27, who lives in central Strasbourg.

“I thought maybe it’s firecrackers,” he said, speaking by phone. “And then, as it got close, it was really shocking. There were a lot of screams. … There were police or soldiers shouting ‘Get inside!’ and ‘Put your hands on your head.’”

Freelance journalist Camille Belsoeur was at a friend’s apartment when they heard the gunfire, at first mistaking it for firecrackers.

“We opened the window. I saw a soldier firing shots, about 12 to 15 shots,” Belsoeur said,

Other soldiers yelled for people to stay indoors and shouted ‘Go home! Go home!’” to those outside, he said. .

Another witness, Peter Fritz, told the BBC one of the four people killed was a Thai tourist who was shot in the head and didn’t respond to lengthy attempts to revive him.

“We tried our best to resuscitate him. We applied CPR. We dragged him into a restaurant close by,” Fritz said.

He said it took more than 45 minutes for an ambulance to arrive, during which time an emergency doctor advised by telephone “that any further efforts would be futile.”

The victim “is still here in this restaurant but we have abandoned all hope for him,” Fritz said.

France previously endured several high-profile extremist attacks, including the coordinated attacks at multiple Paris locations that killed 130 people and wounded hundreds in November 2015. A 2016 truck attack in Nice killed dozens.

President Emmanuel Macron adjourned a meeting at the presidential palace Tuesday night to monitor the emergency, his office said, indicating the gravity of the attack.

Castaner and the Paris prosecutor, who is in charge of anti-terror probes in France, headed to Strasbourg. The prosecutor’s office said the investigation was being conducted on suspicion of murder and attempted murder in relation with a terrorist enterprise charges, suggesting officials think the alleged shooter may have links to extremists.

Warning to remain indoors

In multiple neighbourhoods of Strasbourg, the French Interior Ministry called on the public to remain indoors. French soldiers were on patrol after the shooting.

“Our security and rescue services are mobilised,” Mr Castaner said.

Local authorities tweeted for the public to “avoid the area of the police station,” which is close to the city’s Christmas market.

Strasbourg’s well-known market is set up around the city’s cathedral during the Christmas period and becomes a major gathering place.

Images from the scene show police officers, police vehicles and barricades surrounding the sparkling lights of the market.

European Parliament spokesman Jaume Duch said that “the European Parliament has been closed and no one can leave until further notice.” It wasn’t immediately clear how many people were inside.

European Commission President Jean-Claude Juncker said that “my thoughts are with the victims of the shooting …. Strasbourg is like no other a city which is a symbol of peace and European democracy.”

France has been hit by several extremist attacks, including the 2015 Paris shootings, which killed 130 people and wounded hundreds, and a truck attack in Nice that killed dozens in 2016.

Some Strasbourg residents have reported on social media that they heard gunfire in some parts of the city centre.

Prime Minister Edouard Philippe tweeted that “the situation is still underway, priority is given to security forces and rescuers.”

Strasbourg, about 500 kilometres east of Paris, is on the border with Germany.

The drama recalled a millennial terror plot on Strasbourg’s Christmas market that still marks the collective memory. Ten suspected Islamic militants were convicted and sentenced to prison in December 2004 for their role in a plot to blow up the market on New Year’s Eve 2000.

The Algerian and French-Algerian suspects — including an alleged associate of al-Qaida leader Osama bin Laden — went on trial in October on charges they were involved in the foiled plot for the attack.

They were sentenced to prison terms ranging from one to nine years.

– with AAP