Two people have been killed and 11 others wounded in a shooting at the famed Christmas market in Strasbourg, France.

The gunman, who was identified by security services, is on the run and is being hunted by police. According to police, the suspect had been injured in an exchange of gunfire with a soldier.

The shooting happened in one of Strasbourg’s central squares, Place Kléber.

France’s counter terrorism prosecutor has opened an investigation.

Confirming the death toll had risen to two, the French interior minister, Christophe Castaner, who is on his way to Strasbourg, called it a “seriouspublic security incident”.

Seven of the injured are said to be in a serious condition.

Police said the gunman was already known to the security services as a possible terrorist threat.

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According to France’s BFM TV the suspect had fled his apartment in the Neudorf district of the city in the morning as it was being searched by police in connection with a robbery.

Grenades were found during the search.

Residents in Neudorf have been urged to stay indoors amid unconfirmed reports he has been tracked down and cornered by police in the area.

The European Parliament, which is close to the scene, is currently in lockdown. The parliament’s president, Antonio Tajani, tweeted to say it would”not be intimidated by terrorist or criminal attacks”.

The attack unfolded at around 20:00 local time close to the city’s famed Christmas market.

Emmanuel Foulon, a press officer for the European Parliament, wrote that there was “panic” in the center following the sound of gunfire andthat police with guns were running through the streets.