Hundreds of armed police officers in France are still searching for a gunman who opened fire on shoppers at a popular Christmas Market in Strasbourg.
France's anti-terror prosecutor Rémy Heitz told reporters two people were killed and one left brain-dead in Tuesday's attack in the eastern French city.
Twelve were wounded, six seriously.
The main suspect, named by local media as Chérif Chekatt, is known to authorities as someone who was radicalised in prison.
The 29-year-old was armed with a gun and a knife and escaped the area in a taxi, Mr Heitz said.
The attacker boasted to the driver - who has spoken to police - that he had killed 10 people, and said he had been injured in a firefight with soldiers.
Four people connected to the suspect had been detained overnight in Strasbourg, Mr Heitz added. Sources close to the investigation quoted by Reuters news agency said they were the suspect's mother, father and two brothers.
Hundreds of officers are currently involved in the search for the gunman.
France's Deputy Interior Minister Laurent Nuñez earlier acknowledged he might no longer be in France. Strasbourg is close to the border with Germany.
Interior Minister Christophe Castaner said the country had moved to the highest level of alert, expanding police powers and increasing vigilance.
He added that border controls had been strengthened and security at all Christmas markets would be stepped up.
The mayor of Strasbourg, Roland Ries, has said the Christmas market will be closed on Wednesday and Thursday, with flags lowered to half-mast at the local town hall.
The attack unfolded at around 8pm local time on Tuesday (8am NZT on Wednesday) close to Strasbourg's famed Christmas market near one of the central squares, Place Kléber, which attracts thousands of visitors at this time of year.
A woman called Audrey told France's BFM TV how she came face to face with the killer after watching him shoot a man in the head.
The gunman then opened fire for a second time, and another man fell to ground.
Her friends began to run to safety, but Audrey was frozen to the spot. The gunman turned, and faced her - but then he too ran.
"Why didn't he shoot at me?" she told the TV channel. "I don't know. I think I was extremely lucky. As everyone was screaming he fled."
According to Mr Heitz, as he fled he came into contact with four soldiers. He began firing at them and they fired back, apparently hitting him in the arm.
He managed to reach a taxi which drove him away from the scene and dropped him in the vicinity of the police station in Neudorf, the area where he lives which sits on the border between Germany and France.
When he got out the vehicle, he fired at police officers.
What do we know about the gunman?
According to police - who refer to him as Chérif C - the gunman was born in Strasbourg and was already known to the security services as a possible Islamist terrorist threat.
Neighbours remember Cherif Chekatt as an ordinary local guy, but to security agencies the 29-year-old has represented a potential threat for some time, with his beliefs becoming hardened behind bars.
Chekatt grew up in Strasbourg's Cite du Hohberg, a large, tough housing estate built in the 1960s, where he lived at his parents' apartment.
Neighbours said they believed Chekatt's brother was a radicalised Muslim but had always seen Cherif as a typical young man who dressed in jogging pants and trainers, unlike his sibling who preferred a traditional robe.
"He had spent quite a bit of time in prison and since then we didn't see him much," said a 20-year-old youth who has known Chekatt since he was young, withholding his name.
"He had a radicalised big brother who was always in a djellaba, always at the mosque.
"It's frightening when you know he lived just next to you."
He was the subject of a "fiche S", a watchlist of people who represent a potential threat to national security.
He has 27 convictions for crimes including robbery spanning France, Germany and Switzerland, and has spent considerable time in prison as a result.
Police said the attack followed a police search of Chekatt's flat in Strasbourg in a homicide investigation on Tuesday morning.
Mr Nuñez said his crimes had never before been terrorism-related. But, he added, it was during one period in prison that he was indentified as having become radicalised.
"The fact he was a 'fiche S' did not pre-judge his level of dangerousness," Mr Nuñez told France Inter.
"He encouraged a radical religious practice in prison but nothing indicated that he would carry out an attack," he said.
A search of his home revealed a grenade, a rifle, four knives - two of which were hunting knives - and ammunition.
A German security source said that following a conviction for "aggravated theft" Chekatt had been jailed in the southern German city of Constance from August 2016 to February 2017.
He was released before the end of his two-year, three-month prison sentence into the custody of German police so that he could be deported to France.
A second German security source said he had been banned from re-entering the country.
Several German officials and sources said Chekatt had not been identified as a security threat.
What about the victims?
Anupong Suebsamarn, 45, a tourist from Thailand, has been named by Thai media as one of the dead. He is believed to have been on holiday with his wife.
The Italian foreign ministry has said one of the injured is an Italian journalist who was covering the European parliament, but declined to confirm media reports that he was in a serious condition.
One soldier was slightly injured by a ricocheting bullet during an exchange of fire with the gunman.
Why is Strasbourg a target?
Strasbourg has been the target of jihadist plots in the past.
Not only does it have one of France's oldest Christmas markets, but it is the official seat of the European Parliament. That parliament was in session at the time of Tuesday evening's attack.
In 2000, the Christmas market was at the centre of a failed al-Qaeda plot. Ten Islamist militants were jailed four years later for their part in the planned New Year's Eve attack.
However, MEPs were determined to carry on the morning after the attack, with German MEP Jo Leinen posting a picture of singing and Christmas lights in the European Parliament.
- BBC / Reuters