Interior Minister Christophe Castaner said the shooter had evaded a police dragnet and was on the run, raising concerns of a follow-up attack.
A gunman on a security watch list killed three people and wounded a dozen others near the picturesque Christmas market in the historic French city of Strasbourg on Tuesday evening before fleeing.
Interior Minister Christophe Castaner said the shooter, identified as 29-year-old Cherif Chekkatt, had evaded a police dragnet and was on the run, raising concerns of a follow-up attack.
“The government has raised its security threat to the highest level and is bolstering border controls,” Castaner told a late-night news conference. “We will also reinforce security at all Christmas markets to prevent copycat attacks.”
The French government called the attack an act of terror without saying what the motive was.
However, one man who has known Chekkatt since he was a child told TRT World's Assed Baig he's not sure that the incident was motivated by terrorism.
With France still on high alert after a wave of attacks commissioned or inspired by Islamic State militants since early 2015, the counter-terrorism prosecutor opened an investigation.
Police said Chekatt was known to the intelligence services as a potential security risk.
Castaner said the gunman exchanged shots with security forces twice as he escaped. His whereabouts now were unknown, and elite commandos and helicopters were involved in the manhunt.
TRT World's Christine Pirovolakis reports.
Witnesses described hearing gunshots, screams and shouts of police officers ordering people to stay indoors before the area fell silent and the officers fanned out.
"I heard two or three shots at around 7:55 pm (1855 GMT), then I heard screams. I got close to the window. I saw people running. After that, I closed the shutters. Then I heard more shots, closer this time," Yoann Bazard, 27, who lives in central Strasbourg.
"I thought maybe it's firecrackers," he said, speaking by phone. "And then, as it got close, it was really shocking. There were a lot of screams. ... There were police or soldiers shouting 'Get inside!' and 'Put your hands on your head.'"
Freelance journalist Camille Belsoeur was at a friend's apartment when they heard the gunfire, which she at first mistook for firecrackers.
"We opened the window. I saw a soldier firing shots, about 12 to 15 shots," Belsoeur said,
Other soldiers yelled for people to stay indoors and shouted 'Go home! Go home!'" to those outside, he said.
Another witness, Peter Fritz, told the BBC one of the four people killed was a Thai tourist who was shot in the head and didn't respond to lengthy attempts to revive him.
"We tried our best to resuscitate him. We applied CPR. We dragged him into a restaurant close by," Fritz said.
He said it took more than 45 minutes for an ambulance to arrive, during which time an emergency doctor advised by telephone "that any further efforts would be futile."
The victim "is still here in this restaurant but we have abandoned all hope for him," Fritz said.
France has been hit in recent years with high-profile extremist attacks, including the coordinated attacks at multiple Paris locations that killed 130 people and wounded hundreds in November 2015. A 2016 truck attack in Nice killed dozens.
President Emmanuel Macron adjourned a meeting at the presidential palace Tuesday night to monitor the emergency, his office said, and at midnight presided over a meeting at the Interior Ministry's crisis centre.
The Paris prosecutor, in charge of anti-terror probes in France, was also in Strasbourg. The prosecutor's office said the investigation was being conducted on suspicion of murder and attempted murder in relation with a terrorist enterprise charges, suggesting officials do not exclude links between the shooter and an extremist cell.
Authorities had urged the public to remain indoors at the height of the drama, and people out dining were kept in restaurants for hours, along with lawmakers at the European Parliament, and thousands at a sports stadium. They eventually were allowed to leave, with those with nowhere to go housed at a gymnasium.
The market was closed Wednesday and festivities cancelled in a sign of mourning, Mayor Roland Ries said. Flags in Strasbourg were ordered at half-staff.
The attack revived memories of a new millennium terror plot targeting Strasbourg's Christmas market.
Ten suspected militants were convicted and sentenced to prison in December 2004 for their role in a plot to blow up the market on the New Year's Eve ushering in 2000.
The Algerian and French-Algerian suspects including an alleged associate of al-Qaida leader Osama bin Laden, went on trial in October on charges they were involved in the foiled plot for the attack.
They were sentenced to prison terms ranging from one to nine years.