A suspect known to French authorities as a radical Islamist with mental health troubles stabbed a German tourist to death and wounded two people in central Paris on Saturday before being arrested, officials said.

The attack took place close to the Eiffel Tower during a busy weekend night and came with the country on its highest alert for attacks as tensions rise against the background of the war between Israel and Hamas.

"We will not give in to terrorism," Prime Minister Elisabeth Borne wrote on social media after the attack. 

French President Emmanuel Macron said he was sending his condolences to the family of a German killed in the "terrorist attack."

French anti-terror prosecutors said that they would now take on the investigation.

The attacker was known to authorities as a radical Islamist and was being treated for mental illness, Interior Minister Gerald Darmanin said at the scene by the River Seine, adding that the man had shouted "Allahu Akbar" ("God is greatest") before being arrested.

Authorities said he fatally stabbed the German tourist with a knife and then used a hammer to attack others as he sought to escape on the other side of the River Seine.

The area by Bir Hakeim bridge, usually thronging with tourists and locals, was cordoned off by police and bright with the flashing lights of security forces and emergency services.

The Paris prosecutor's office said the attacker, born in 1997, is French and has been arrested in an investigation into murder and attempted murder.

Darmanin said the man had already been sentenced in 2016 to four years in prison for planning another attack which he failed to carry out.

"A man attacked a couple who were foreign tourists. A German tourist who was born in the Philippines died from the stabbing," he said.

A taxi driver who witnessed the scene intervened, Darmanin said. The attacker then crossed the Seine attacking others and injuring one with a hammer.

Police chased in pursuit and used a taser to neutralize the man, who was then arrested.

"He had threatened them very violently... he will now have to answer for his actions before justice," Darmanin said.

The suspect, who lived with his parents in the Esonnne region south of Paris, told police he could not stand Muslims being killed in "Afghanistan and Palestine," according to the minister.

Macron, writing on social, thanked security forces for their quick arrest of the suspected attacker and said justice should be served "in the name of the French people."

"Paris is in mourning after this terrible attack," Transport Minister Clement Beaune wrote on social media. 

In:
• Paris
• Fatal Stabbing
• France
• Stabbing