The Swedish Prime Minister has said a lorry attack that killed at least three people in Stockholm is terror-related.

Stefan Lofven said everything indicates that the crash was a deliberate attack.

"Sweden has been attacked," he told reporters. "Everything indicates that this is a terrorist attack."

Scene after the truck attack in Stockholm sees crowds flee

The Prime Minister said the government was being kept continually informed and was doing everything it could to support authorities.

No group has yet claimed responsibility for the incident outside the well-known Ahlens department store, on a busy shopping street.

Witnesses said they heard a crash and the sound of screaming, with people running outside to find victims lying in the road.

Police said they could not confirm any arrests, with a manhunt underway for a suspect described as wearing a green jacket, grey hoodie and white shoes.

A large area of central Stockholm has been cordoned off and evacuated by police, with Sweden's parliament evacuated as a precaution and public transport in the capital shut down.

The lorry belonged to Swedish brewery Spendrups, which said the vehicle had been hijacked earlier on Friday.

Jean-Claude Juncker, the President of the European Commission, was among those sending his condolences to the victims.

In pictures: Stockholm truck attack Show all 15 1 /15 In pictures: Stockholm truck attack In pictures: Stockholm truck attack 3 people dead when a truck crashed into Ahlens department store in central Stockholm, Sweden Rex In pictures: Stockholm truck attack People were killed when a truck crashed into department store Ahlens on Drottninggatan, in central Stockholm Reuters In pictures: Stockholm truck attack Special Police forces work at the scene where a truck crashed into the Ahlens department store at Drottninggatan in central Stockholm Getty Images In pictures: Stockholm truck attack Woman is assisted at the scene after a truck crashed into an Ahlens department store in Stockholm Rex In pictures: Stockholm truck attack A policewoman in a gas mask operates at the scene where a truck crashed into the Ahlens department store at Drottninggatan in central Stockholm Getty Images In pictures: Stockholm truck attack People react at the scene where a truck crashed into the Ahlens department store at Drottninggatan in central Stockholm Rex In pictures: Stockholm truck attack Reports say three people have died after a truck crashed into an Ahlens department store in Stockholm Rex In pictures: Stockholm truck attack Armed police operates at the scene where a truck crashed into the Ahlens department store at Drottninggatan in central Stockholm Getty Images In pictures: Stockholm truck attack People react at the scene where a truck crashed into the Ahlens department store at Drottninggatan in central Stockholm Getty Images In pictures: Stockholm truck attack Emergency services close to the scene of an incident in Drottninggatan, a street in the centre of Stockholm, Sweden Lasse Gare/PA Wire In pictures: Stockholm truck attack Passers react at the scene where a truck crashed into the Ahlens department store at Drottninggatan in central Stockholm Getty Images In pictures: Stockholm truck attack People killed in incident when a truck was driven into a department store in central Stockholm Reuters In pictures: Stockholm truck attack Police officers work at the scene where a truck crashed into the Ahlens department store at Drottninggatan in central Stockholm Getty Images In pictures: Stockholm truck attack A general view shows a Ahlens department store after a truck reportedly crashed into it, at Drottninggatan in central Stockholm, Sweden EPA In pictures: Stockholm truck attack A view of a street after a truck reportedly crashed into a department store in central Stockholm, Sweden EPA

"One of Europe's most vibrant and colourful cities appears to have been struck by those wishing it – and our very way of life – harm," he added.

"We stand shoulder to shoulder in solidarity with the people of Sweden."

The incident came just weeks after a suspected Isis supporter killed five people in London before being shot dead by police.

Khalid Masood rammed his car into pedestrians on Westminster Bridge, then stabbed a police officer to death at the entrance to the Houses of Parliament.

Isis propaganda has continued attempting to incite terror attacks in Europe, the US, Australia and other countries supporting military operations against its fighters.

An issue of its Rumiyah magazine issued in November advised jihadis to launch vehicle attacks in an article citing the Nice lorry attack that killed 86 people as a “superb demonstration”.

Police at the scene where a lorry crashed into the Ahlens department store in central Stockholm (Getty Images)

“Having a secondary weapon, such as a gun or a knife, is also a great way to combine a vehicle attack with other forms,” it read.

Little over a month later, a failed Tunisian asylum seeker hijacked a lorry and ploughed it into a Christmas market in Berlin, killing 11 people.

Isis has claimed a previous terror attack in Sweden, which has been preparing for the expected return of some of around 300 jihadis who left the country to fight abroad.

It claimed responsibility for a firebombing in Malmö in October that targeted a building used as an assembly hall by Shia Muslims, who Isis have declared apostates and targeted with terror attacks around the world.

A 30-year-old Syrian man was charged with terror offences over the arson attack last month, after prosecutors found he had affiliated himself with Isis. No one was injured.