Dozens of people have been injured, some of them children, after a local man appeared to deliberately drive a car into a carnival parade procession in the central German town of Volkmarsen, police have said.

The driver was arrested but police could not immediately provide details about the man’s motives, although Bild newspaper cited a spokesman, Henning Hinn, as saying they were “working on the assumption that it was a deliberate act”.

There were several dozen wounded, some with life-threatening injuries and several of them children, Hinn said.

The interior ministry in the state of Hesse said the driver, described by police as a 29-year-old German national from the local area, was not in a fit state to be questioned. “Given the situation on the ground, a deliberate attack cannot currently be ruled out,” a spokesperson said.

Facebook Twitter Pinterest Emergency vehicles at the scene. Photograph: Uwe Zucchi/AP

Police vehicles and ambulances were at the scene. Police called off all carnival parades in the state of Hesse as a precautionary measure, but said they were not aware of any danger elsewhere in Germany.

The DPA news agency said no deaths had been reported in the crash. Police had previously said it was not clear whether mechanical problems, driver error or illness were to blame, or whether the car had been intentionally driven into the crowd.

Video footage showed a locally registered silver Mercedes hatchback, its hazard lights flashing, on a pavement outside a supermarket in the town, which has a population of nearly 7,000 and is about 30km from Kassel, east of Düsseldorf.

Local media cited witnesses as saying the car ploughed “at full throttle” about 30 metres into the parade before it finally came to a halt, adding that driver had driven round a traffic barrier and appeared to have deliberately targeted children. A witness said the driver had accelerated after driving past the police barrier.

One witness, Elmar Schulten, told Bild that he saw “many small children” on the ground. Police had to protect the driver as carnival marchers, including parents of some of those injured, rushed furiously towards him, Schulten said.

The incident occurred on Rose Monday, the highlight of Germany’s annual celebration of Carnival. Hugely popular in Rhineland cities such as Cologne and Düsseldorf, tens of thousands of people dress up to attend street parades featuring comical or satirical floats from which people play music and throw sweets.

Facebook Twitter Pinterest Police at work near broken handcart and a silver Mercedes. Photograph: Elmar Schulten/AFP via Getty Images

It came less than a week after a man shot dead 10 people before killing himself in the same state, in one of the worst racist attacks in Germany since the second world war. The gunman, who left behind a racist manifesto, first opened fire at a shisha bar and a cafe in Hanau, killing nine people, before shooting dead his mother and himself.

The rampage fuelled concerns over Germany’s increasingly emboldened far right scene, after a pro-migrant politician was murdered in June and an antisemitic attack on a synagogue left two dead in the city of Halle last October.

Condemning the violence in Hanau, Angela Merkel, the German chancellor, said the country had to fight back against the “poison” of racism and hatred running through German society. The interior minister, Horst Seehofer, promised to ramp up security and put more police at mosques, train stations, airports and borders.

Thousands of Germans later joined vigils to mourn the victims and call for more protection for minorities. Many also used the occasion to vent their anger at the far-right AfD party, which has been accused of stoking anti-foreigner sentiment and normalising hate speech in recent years.

Germany’s deadliest terror attack in recent history took place in 2016, when a failed Tunisian asylum seeker drove a lorry into a crowded Berlin Christmas market, killing 12 people. The attacker had pledged allegiance to Islamic State.

Additional reporting by Philip Oltermann in Berlin