Update: GERMANY'S CHIEF FEDERAL PROSECUTOR OFFICE SAYS DETAINED SUSPECT IN BERLIN CHRISTMAS MARKET ATTACK HAS BEEN RELEASED

German Interior Minister Thomas de Maiziere said on Tuesday that investigators are following several leads on the Berlin Christmas market attack that killed 12 people. "We just heard about the supposed claim of responsibility by this so-called Islamic State that is in fact a gang of terrorists," de Maiziere told ARD broadcaster.

"There are several leads that investigators are following now," the minister added.

De Maiziere added that "nobody will rest until the perpetrator or the perpetrators are caught".

And so the manhunt behins.

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Earlier:

Following yesterday's deadly terrorist attack, in which a truck driver rammed into a crowded Christmas market, killing 12 and injuring 48, the German mood has been dour, deteriorating further this morning when the interior minister of the German state of Saarland said on Tuesday that Germany is in a state of war. "We must say that we are in a state of war, although some people, who always only want to see good, do not want to see this," the minister, Klaus Bouillon, told German broadcaster SR.

For Germany this latest attack has been a painful case of double deja vu, reminiscent not only of the truck attack in Nice, France but also reminding the local population that the surge in terrorism acticity observed over the summer in Germany is hardly over.

German Interior Minister Thomas de Maiziere said there is "no doubt" that the truck incident at a Christmas market in Berlin was a terrorist attack. "At this point, we have no doubt that this horrific crime was a terrorist attack," de Maiziere told a news conference on Tuesday. He added that there is no evidence so far to indicate the suspect is linked to Islamic State or any other terrorist group. Addressing the nation, a "horrified, shocked" Angela Merkel confirmed as much when she said "we must assume this was a terrorist attack."

Making matters worse, Berlin was put on high alert Tuesday after authorities said the suspect they had detained in connection with a deadly truck rampage may have been the wrong man. As reported previously, police had detained a Pakistani refugee on Monday evening after witnesses reported seeing the driver of the truck flee the devastated market in front of the Kaiser Wilhelm Memorial Church. The man taken into custody appeared to match the description supplied by the witnesses, though he denied having anything to do with the attack, Berlin police chief Klaus Kandt said.

“The driver was followed for a short way, so that we knew the beginning of the suspected escape route,” he told journalists, adding that the man in custody had been arrested close to Berlin’s Siegessäule monument barely an hour after the attack took place.

“The suspect . . . was arrested because he could match the description [we had], but he always denied any involvement,” Mr Kandt said. “It is the case that this person was not continuously under observation from the vehicle to the arrest . . . and therefore there is some uncertainty, and as a result we are of course taking enhanced precautions,” he said. “It is possible that we are dealing with a dangerous criminal."

Mr de Maizière said the suspect was known to police for minor offences but was not on any terrorist watchlist. He said there had been no claim of responsibility. German media named the man in custody as “Naved B”, a 23-year-old Pakistani.

By Tuesday afternoon, German officials were saying they weren’t certain they had the right man, and visitors and residents of the city were being urged by police to remain vigilant.

“The detained suspect is currently denying the deed,” the Berlin police posted on Twitter. “We’re especially alert as a result. Please do the same.”

As a result, as the FT adds, "Germany was braced for a possible manhunt on Tuesday after doubts emerged as to whether the man arrested after an attack on a Christmas market in Berlin was indeed the perpetrator."

Adding to the confusion, German authorities said they had no definitive evidence shedding light on the motive for the assault and had seen no claim of responsibility from terrorist groups. “We are, of course, highly alarmed,” Holger Münch, head of Germany’s federal criminal police, said in a news conference. “We are investigating, of course, in all directions.”

Another cause for concern for investigators was that the original driver of the apparently stolen truck used in the attack was found shot dead in the vehicle’s passenger seat. The weapon hasn’t been recovered, officials said.

"We haven’t yet been able to confirm that this person was in fact the driver,” Mr. Kandt, the Berlin police chief, said at a news conference. Later he told reporters: “It is possible that we have a dangerous criminal here in the area.”

Meanwhile, the Polish haulage company boss whose driver died in the vehicle claims a picture he saw of his driver shows that he was involved in a struggle and that he had suffered stab wounds. The police also said that the Polish man was shot. However, as The Local adds, it seems that investigators have not found gun discharge residue from a weapon on the suspect's clothes, nor have they found blood or any signs that he was involved in a struggle. That is according to information Spiegel has from high ranking police officials. At the same time, according to DPA, blood-covered clothes were found in the vehicle, suggesting that the attacker could have changed what he was wearing after murdering the Polish driver.

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It wasn't just Berlin which was in a state of heightened alert: London police said on Tuesday they are reviewing their plans for protecting public events over the festive period after Monday's tragic events. "The Metropolitan Police has detailed plans for protecting public events over the Christmas and New Year period," police said in a statement. "As a matter of routine, as a precaution, we review our plans after attacks overseas, and we are doing so at present following the awful incidents in Berlin and Ankara last night."

Meanwhile, shortly after her televized address to the German people, Merkel visited the attack site Tuesday afternoon. She and other senior government officials urged Germans not to give in to fear.

“We don’t want to live paralyzed by fear of evil,” Merkel said.

As officials voiced their determination that acts of terror shouldn’t be allowed to subvert normal life, Christmas markets in Berlin, a major tourist draw, were asked to close for the day on Tuesday out of respect for the victims. Markets elsewhere in Germany, they said, should stay open.

In her remarks to reporters, Merkel acknowledged the pressure that was likely to come to bear on her policy of accepting refugees if, as initial reports from officials indicated, an immigrant was to blame for assault, which according to some skeptics, may explain the U-turn in the change of narrative involving the Pakistani refugee.

“I know it would be especially hard to bear for all of us if it should be confirmed that the person who committed this act sought protection and asylum in Germany,” Ms. Merkel told a news conference at the Chancellery in Berlin. “This would be especially despicable toward the many, many Germans who are daily engaged in helping refugees, and toward the many, many people who truly need this protection and strive to integrate themselves into our country.”

Ultimately, the question is how much an impact on the 2017 political elections would a confirmation that the perpetrator was, indeed, a refugee have.

As the WSJ notes, "any involvement in the attack by a recent migrant to Germany in the truck attack could stoke tensions over a wave of asylum seekers and migrants from Muslim countries that has fueled nationalist sentiment and roiled politics in Germany and across Europe."

The FT also chimes in: "If the attacker is found to be an asylum seeker it will increase pressure on German chancellor Angela Merkel and put the refugee issue back at the top of the political agenda just months before federal elections where she is seeking a fourth term."

She has already come under fire from politicians on the right, who claim her decision to throw open Germany’s borders to tens of thousands of refugees in the summer of 2015 compromised national security. “These are Merkel’s dead!” tweeted Markus Pretzell, a leading figure in the populist Alternative for Germany party which calls for strict controls on immigration.

What makes yesterday's attack even more surprisingly, is that as we observed on Sunday night, officials had warned about the potential for an attack on a Christmas market in Germany. The markets draw millions of locals and tourists to squares in small towns and big cities alike. In November, the U.S. State Department issued a travel alert warning that Islamic State and al Qaeda were planning terrorist attacks “in Europe, with a focus on the upcoming holiday season and associated events.”

Earlier this month, officials said that Germany narrowly avoided a suspected Islamist attack on a Christmas market in the city of Ludwigshafen. Authorities reported that a 12-year-old German-Iraqi boy twice planted an explosive device at a Christmas market there that failed to detonate.

While many German politicians urged caution and calm, some said the attack meant that the government’s immigration policy had to be reconsidered. The most influential politician taking such a position Tuesday morning was Bavarian Premier Horst Seehofer, the head of Bavaria’s conservative Christian Social Union and a governing partner of Ms. Merkel.

“We owe it to the victims, the people affected, and the whole public to rethink and readjust our entire immigration and security policy,” Mr. Seehofer said.

Others were more aggressive, and Merkel's political opponents quickly seized the opportunity to again attack her "open door" refugee policy, which has polarized voters and fed support for the anti-immigration Alternative for Germany party, known as the AfD. While the influx of asylum seekers has dropped off substantially this year, the Berlin deaths threaten to further erode Merkel's domestic political standing going into an election year.

“Germany is no longer safe,” AfD co-chairwoman Frauke Petry said in an e-mailed statement. “We must be under no illusions. The breeding ground in which such acts can flourish has been negligently and systematically imported over the past year and a half.” She added that "radical Islamic terrorism has struck in the heart of Germany."

Judging by the state of near emergency in Germany's capital, she is, at least as of this moment, correct; and once the terrorist suspect is caught - and should he be confirmed to be a refugee - Petry may end up the biggest winner as questions around Merkel's political future become increasingly louder.