A friend of a man who stabbed several people in central Paris has been arrested by police, they confirmed Sunday.

The friend, 21, was seized in the French city of Strasbourg and is being held for questioning.

France's anti-terror unit is leading the investigation into the knife attack, authorities added Sunday, after the so-called Islamic State claimed responsibility for the stabbing spree in which one person was killed.

The attacker went on a rampage near St Augustin Street in the Opera district of Paris shortly before 9pm local time on Saturday, killing one and wounding four.

He was then shot dead by police.

Judicial sources have said the perpetrator was a 21-year-old French national, born in Chechnya, Russia, in 1997.

Among the victims were a Chinese and a Luxembourgish citizen.

According to sources, he had been categorised as "fiche S" — used for individuals considered a threat to national security — and his parents have been taken in for questioning.

"The price of blood"

"France once again paid the price of blood but did not give an inch to the enemies of freedom," French President Emmanuel Macron posted on Twitter shortly after the attack.

"All my thoughts go to the victims and the wounded of the knife attack perpetrated tonight in Paris, as well as to their relatives," he added, before praising police officers for their courage.

Interior Minister Gerard Collomb also applauded authorities for their “composure and quick response.”

"My primary thoughts go to the victims of this odious act," He added.

Collomb convened an emergency meeting with security and anti-terror officials on Sunday to discuss how best to tackle the extremist threat.

"Allahu akbar"

Footage posted on social media showed people fleeing the scene as a man lies on the ground.

A wounded man is seen on Rue Marsollier in Paris. TWITTER /@DEZOUZART/via REUTERS

According to eyewitnesses, the assailant shouted “Allahu Akbar” before stabbing passers-by.

Journalist Charles Pellegrin was attending an event in the area when the incident unfolded.

He told his 600 followers on Twitter: "I came out of a comedy show near Opera in central Paris and was immediately told to go back in because there was a madman with a knife.

"Once back inside we heard sirens and 2 gun shots. I then spoke to eyewitnesses who told me a man stabbed multilple [sic] people at random.

"The eyewitnesses then told me police tried to tazer the attacker. This did not work, so they fired two shots.”

Fellow eyewitness Fiona Zanetti described hearing screams and seeing blood as she left a restaurant near the scene.

According to French Prime Minister, the assailant was "neutralised" nine minutes after authorities were first alerted.

France has been on high alert for terrorism following a spate of Islamic-State-inspired attacks within the past three years. However, the motivations behind Saturday night's stabbing are not yet clear.

Among the most deadly were the Paris attacks of November 2015, when 130 people were killed in co-ordinated shootings and bombings across the city. The so-called Islamic State later claimed responsibility for the murders.

In July 2016, 89 people were mowed down in Nice after a 19-tonne lorry was deliberately driven into crowds celebrating Bastille Day.