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A terror probe has been launched after a gunman killed at least three people and injured 12 others near Strasbourg Christmas Market.

The wounded were seen lying on the floor and desperately taking shelter as the market and nearby restaurants were evacuated.

Chilling videos capture terrified people cowering on the floor and running in fear.

Police armed with machine guns were seen running into Place Kleber.

The French prosecutor has said anti-terror cops are now investigating the incident, but a motive had not yet been confirmed.

The suspect was identified by police as Strasbourg-born Chekatt Cherif, 29.

The gunman, who is still at large, is known to France's internal security services as a suspected security risk.

He is said to be on a watch list of around 26,000 people, of whom 10,000 are believed to have been radicalised.

Cherif, who was reportedly born in Strasbourg, had been flagged as a suspected extremist, according to local media.

Grenades were found at the home of the suspected terrorist after he went on the run, said an investigating source

Seven of those injured are thought to be in a serious condition.

People have been warned to stay indoors by authorities and said they have cornered the suspect in the city centre. Shots have been fired, reports say.

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Witnesses have said online there are other people injured on the floor.

A BBC reporter says on Twitter a French journalist "saw soldiers shoot a man dead, who was reportedly targeting them."

Peter Fritz, a witness, said he found a person who had been shot, lying on a bridge. He told the BBC he tried to resuscitate him but the man died.

And Doris Manou told the BBC: "Earlier on I was walking around the Christmas market in central Strasbourg and I passed Place Kleber where the shooting took place just minutes before it happened.

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"Then I continued walking on Rue du Dome when I saw the army with a group of 10-12 soldiers walking towards me with their guns pointed to the street and around them everyone was running from all directions.

"The soldiers were very focused on their mission, they were running."

The French Interior Ministry has confirmed a "serious public security incident" is ongoing.

In Neudorf, an area nearby, it is believed more gunshots we fired. There is also a heavy police presence, with military helicopters, there. Residents in this area have also been told to remain indoors.

It is thought the attack occurred at 7pm in the French city.

Emmanuel Foulon, a press officer for the European Parliament, wrote there was "panic" in the city centre following the sound of gunfire and police with guns were running through the streets.

(Image: AFP/Getty Images)

Emmanuel Macron, French President, has been kept informed of the incident, it is reported.

Theresa May said she was "shocked and saddened by the terrible attack."

British MEP Richard Corbett has tweeted: "Am in restaurant in centre of Strasbourg where shots fired with unconfirmed reports of 3 dead.

"Restaurant locked and not letting anyone in or out."

It's happened as the European Parliament are in the city for a crunch meeting.

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MEP Martina Anderson, the Irish politician, has tweeted from the scene.

She said: "No confirmed reports but footage out of people on the ground injuries if not worse.

"My thoughts & prayers with all who are injured."

Malta MEP Roberta Metsola said she was in lockdown inside the European Parliament building.

Thorbjorn Jagland, Secretary General of the Council of Europe, based in Strasbourg, wrote on Twitter: "The police informed me tonight of a shooting in Strasbourg with possibly one victim and several wounded.

"The perpetrator is still on the run.

"This is a serious incident and I advise all staff and visitors to stay at home or indoors for the moment."

Antonio Tajani, President of the European Paraliament, tweeted: "I express all my sorrow for the victims of the Strasbourg attacks. This Parliament will not be intimidated by terrorist or criminal attacks. Let us move on. We will continue to work and react strengthened by freedom and democracy against terrorist violence."

(Image: @ petervdalen)

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Strasbourg deputy mayor Alain Fontanel tweeted: "Shooting in downtown Strasbourg. Thank you all for staying home while waiting for a clarification of the situation."

A councillor has tweeted in French, which translates to: "We are prostrate in the dark because there would be gunshots on the side Grand Rue."

No Brits have been reported injured, the Foreign Office said.

Strasbourg's Christmas Market draws millions of tourists every year.

This breaking story is being regularly updated.