At least one person has died and two police officers have been seriously injured in a stabbing incident in eastern France, according to local media reports, with the alleged perpetrator taken into police custody.

The incident took place shortly before 4:00pm (15:00 GMT) during a demonstration on Saturday in the city of Mulhouse, French channel BFM TV said on Saturday, citing the local prosecutor’s office.

A passer-by was killed trying to intervene, while three police officers were injured, the prosecutor’s office added.

France’s national anti-terror prosecutors unit (PNAT) has taken charge of the investigation. Police officials have established a security parameter at the scene and military units have also been sent as backup. Forensic scientists have also begun searching for evidence.

Mulhouse public prosecutor Nicolas Heitz has told the AFP news agency that the suspect, aged 37, is on a “terror” prevention watchlist, called FSPRT. It was launched in 2015 following deadly attacks on satirical magazine Charlie Hebdo’s offices and on a Jewish supermarket.

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“Horror has seized our city,” Mulhouse mayor Michele Lutz said on Facebook.

French President Emmanuel Macron called the stabbing “Islamist terrorism”.

“It is without any doubt an act of Islamist terrorism,” Macron told reporters on the sidelines of the annual French farm show, adding that the interior minister was on his way to Mulhouse.

Prime Minister Francois Bayrou said that “fanaticism has struck again, and we are in mourning”.

As investigations continue, the PNAT added that it is recording the stabbing for murder, and attempted murder “in connection with a terrorist enterprise”.