STRASBOURG, France (Reuters) - Armed police patrolled the streets and manned checkpoints; shops and restaurants stayed shuttered, and residents laid tributes as Strasbourg recoiled on Wednesday from the deadly shooting at a Christmas market.

Slideshow ( 2 images )

Blood stains spattered the Rue Des Grandes Arcades, a shopping street where some of the victims were shot. In Place Kleber, at the center of the French city, well-wishers left flowers at the foot of a Christmas tree, in memory of the two people killed.

“It’s destroyed the Christmas market. Nobody will want to come here,” said Bui, a 46-year-old waiter at the Casa Toscana restaurant.

“We thought it was firecrackers or a joke to begin with, what with the yellow vest protests at the moment,” he said, referring to nationwide demonstrations against high living costs. “It took about five minutes for people to realize what was going on.”

The attack risks dealing a devastating blow to the city’s retail and tourism industries, just as the month-long yellow vest unrest may have blunted the French economy.

The Saint Sepulcre restaurant, close to where the first shots were fired, was closed by manager Claude Fricker on Wednesday as two of her chefs who helped the wounded recovered from the trauma.

“We know that we’re not safe anywhere despite all the security measures,” said a local pensioner who gave his name as Ralph. “It’s impossible to counter the actions of a madman, we should not give into panic or to paranoia.”

First signs, though, were that visitors felt differently. At the Hotel Kleber on the main square, staff handled a flood of cancellations ahead of what should be one of the busiest shopping weekends before Christmas.

“We’re getting a lot of calls and emails for cancellations. It’s going to hit us hard, said receptionist Elena Bonal.

Mayor Roland Ries told reporters the city would not be cowed by what he said was indisputably an act of terror.

“Life must resume tomorrow. The Christmas market will reopen tomorrow and we will restart our lives on the basis of our values. We won’t let the act of a madman knock us down.”