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CAIRO, May 23 (Reuters) - Islamic State claimed responsibility for Monday's deadly attack at the Manchester Arena and said it was carried out with an explosive device planted at the concert, according to a statement the group posted on Telegram.

"One of the soldiers of the Caliphate was able to place an explosive device within a gathering of the Crusaders in the city of Manchester," the statement said.

(Reporting by Omar Fahmy; Editing by Andrew Heavens)

This is a developing news update. Reuters's earlier story follows...

MANCHESTER, England, May 23 (Reuters) - A suicide bomber killed at least 22 people and wounded 59 at a packed concert hall in the English city of Manchester in what Prime Minister Theresa May called a sickening act targeting children and young people.



May said police believed they knew the identity of the bomber and police then said a 23-year-old man had been arrested in connection with the attack carried out late on Monday evening as people began leaving a concert given by Ariana Grande, a U.S. singer who attracts a large number of young and teenage fans.

"All acts of terrorism are cowardly...but this attack stands out for its appalling sickening cowardice, deliberately targeting innocent, defenceless children and young people who should have been enjoying one of the most memorable nights of their lives," May said outside her Downing Street office in London.

"The attempt to divide us met countless acts of kindness that brought people closer together."

The northern English city remained on high alert. A Reuters witnesses said they heard a "big bang" at Manchester's Arndale shopping mall and saw people running from the building. Police said they were dealing with an incident inside. The shopping centre reopened soon afterward, a Reuters witness said.

London Mayor Sadiq Khan said more police had been ordered onto the streets of the British capital.

Monday's attack was the deadliest in Britain since four British Muslims killed 52 people in suicide bombings on London's transport system in 2005. But it will have reverberations far beyond British shores.

Attacks in cities including Paris, Nice, Brussels, St Petersburg, Berlin and London have shocked Europeans already anxious over security challenges from mass immigration and pockets of domestic Islamist radicalism. The Islamic State militant group has called for attacks as retaliation for Western involvement in the conflicts in Syria and Iraq.

Witnesses related the horror of the Manchester blast, which unleashed a stampede just as the concert ended at what is Europe's largest indoor arena, full to a capacity of 21,000.

"We ran and people were screaming around us and pushing on the stairs to go outside and people were falling down, girls were crying, and we saw these women being treated by paramedics having open wounds on their legs ... it was just chaos," said Sebastian Diaz, 19. "It was literally just a minute after it ended, the lights came on and the bomb went off."

U.S. President Donald Trump described the attack as the work of "evil losers". German Chancellor Angela Merkel said it "will only strengthen our resolve to...work with our British friends against those who plan and carry out such inhumane deeds."

A source with knowledge of the situation said the bomber's explosives were packed with metal and bolts. At least 19 of those wounded were in a critical condition, the source said.

A video posted on Twitter showed fans, many of them young, screaming and running from the venue. Dozens of parents frantically searched for their children, posting photos and pleading for information on social media.

"We were making our way out and when we were right by the door there was a massive explosion and everybody was screaming," concert-goer Catherine Macfarlane told Reuters.

"It was a huge explosion - you could feel it in your chest."

Singer Ariana Grande, 23, said on Twitter: "broken. from the bottom of my heart, i am so so sorry. i don't have words."

May, who faces an election in two-and-a-half weeks, said her thoughts were with the victims and their families. She and Jeremy Corbyn, the leader of the opposition Labour Party, agreed to suspend campaigning ahead of the June 8 vote.

SUICIDE BOMBER?

There was no immediate claim of responsibility for the bombing, but U.S. officials drew parallels to the coordinated attacks in November 2015 by Islamist militants on the Bataclan concert hall and other sites in Paris that killed 130 people.

"It clearly bears the hallmark of Daesh (Islamic State)," said former French intelligence agent Claude Moniquet, now a Brussels-based security consultant, "because Ariana Grande is a young singer who attracts a very young audience, teenagers.

"So very clearly the aim was to do as much harm as possible, to shock British society as much as possible."

Islamic State supporters took to social media to celebrate the blast and some encouraged similar attacks elsewhere.

Britain is on its second-highest alert level of "severe", meaning an attack by militants is considered highly likely.

British counter-terrorism police have said they are making on average an arrest every day in connection with suspected terrorism.

In March, a British-born convert to Islam ploughed a car into pedestrians on London's Westminster Bridge, killing four people before stabbing to death a police officer who was on the grounds of parliament. The man was shot dead at the scene.

In 2015, Pakistani student Abid Naseer was convicted in a U.S. court of conspiring with al Qaeda to blow up the Arndale shopping centre in the centre of Manchester in April 2009.

PARENTS' ANGUISH

Desperate parents and friends used social media to search for loved ones who attended Monday's concert while the wounded were being treated at six hospitals across Manchester.

"Everyone pls share this, my little sister Emma was at the Ari concert tonight in #Manchester and she isn't answering her phone, pls help me," said one message posted alongside a picture of a blonde girl with flowers in her hair.

Paula Robinson, 48, from West Dalton about 40 miles east of Manchester, said she was at the train station next to the arena with her husband when she felt the explosion and saw dozens of teenage girls screaming and running away from arena.

"We ran out," Robinson told Reuters. "It was literally seconds after the explosion. I got the teens to run with me."

Robinson took dozens of teenage girls to the nearby Holiday Inn Express hotel and tweeted out her phone number to worried parents, telling them to meet her there. She said her phone had not stopped ringing since her tweet.

"Parents were frantic running about trying to get to their children," she said. "There were lots of lots children at Holiday Inn."