Armed police and soldiers were seen surrounding the neighbourhood in eastern Paris, near the Richard Lenoir Metro station, while hunting two suspects. They arrested one man on the steps of the Opera Bastille at around 12.45pm local time. He had traces of blood on his clothes, according to French newspaper Figaro.
At least two victims are in a critical condition in hospital.
A witness told BFMTV: “I saw a young woman with a huge head injury, blood was running all over her face.”
Police said a blade was found, with different officers describing it as both a machete and a meat cleaver.
Emergency services also discovered a suspicious package and cordoned off the area.
The two victims have been identified as a man and a woman who work in production at the First Lines news agency, located next to the former offices of satirical magazine Charlie Hebdo.
An employee of the agency Paul Moreira told BFMTV: “We have two injured, one of which is serious.
“It was someone who was in the street with a kind of chopper, who attacked them in front of the building .”
President of the Île-de-France region Valérie Pécresse tweeted: “Extremely shocked by the deadly attack near the former premises of #CharlieHebdo, in a district of Paris which has already paid a heavy price for terrorist violence.”
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Residents were told to avoid the area while the suspect was on the run.
Mayor François Vauglin sent an urgent warning to parents to ensure the safety of their children.
He told BFMTV: “I asked nurseries, schools and businesses to barricade themselves.
“Don’t pick up your children from school.”
The motive for this attack is not yet clear.
The attack has also not been linked to Charlie Hebdo, when 12 people were killed after Islamic extremists attacked the offices, which have since moved from the area.
The trial in the attacks is currently taking place in Paris.
The attackers’ widows are scheduled to testify this afternoon.