France's interior minister said a gunman killed three people and wounded another 12 near a Christmas market in the eastern French city of Strasbourg.
Police were still seeking the suspected shooter, Interior Minister Christophe Castaner said, but the gunman was known to police and had a criminal record. Local security agencies said he was on a watch list of suspected extremists.
"Serious public security event under way in Strasbourg. Residents are asked to stay at home," the Interior Ministry said in a tweet.
Castaner said authorities were raising the security threat level and boosting security of Christmas markets elsewhere around the country, as well as strengthening border controls.
The Christmas market in Strasbourg is an annual tourist attraction visited by hundreds of thousands of people.
The Strasbourg-based European Parliament which is currently in plenary session, was on lockdown, with lawmakers, staff and journalists unable to leave the building.
Hundreds of European lawmakers and officials are in Strasbourg on their monthly visit from Brussels.
French President Emmanuel Macron is being kept informed of the situation in Strasbourg, and has sent Castaner to the scene of the shooting, the French president's office said.
Security has been stepped up in recent years after a series of attacks in France by Islamist militants since 2015.
Special anti-terrorist army units have been deployed and soldiers and armed police are regularly seen patrolling among the 300 wooden chalets that make up the Strasbourg Christmas market.
The incident comes at a time when French security forces are stretched after more than three weeks of antigovernment demonstrations.