A stolen truck ploughed into a crowd in central Stockholm on Friday that left three people dead and several others injured.
Swedish police say they have arrested a man who is "likely" the driver of a truck which plowed into a group of pedestrians and store, killing four people.
Live television footage showed smoke coming out of the upscale Ahlens department store on Drottninggatan Street, which the truck smashed into.
Sweden's police chief Dan Eliasson said they have had no contact with "the person or persons" who drove the stolen truck but police started "a preliminary investigation of suspected terrorist crimes".
Stefan Lofven, the Swedish Prime Minister, said all evidence pointed to "a terror attack" but vowed that terrorists "will never, ever win".
"We have arrested one in whom we are particularly interested", Jan Evensson of the Stockholm police told a news conference.
Stockholm police have asked citizens to stay home and avoid the city centre. My thoughts are with the families of the deceased & prayers with those injured.
"I saw hundreds of people run - they ran for their lives", a witness told the Guardian. "There was blood everywhere", she said.
Stockholm police would not comment on reports that a second man had been arrested in the northern suburb of Hjulsta but said others were still being sought.
Police on Friday released a grainy picture of a suspect captured on video surveillance cameras near the scene of the attack, but said they did not now have him in custody.
"A woman was standing there with her baby on her arm, like she was paralysed", said another person.
A truck crashed crashed into a department store in Stockholm.
There was no immediate claim of responsibility for Friday's attack.
"Today we have been subjected to a bad attack at the heart of our capital".
The attack took place in the middle of the day.
In 2010, another section of Drottninggatan was also the scene of Sweden's only other terror attack, when a suicide bomber blew himself up, slightly injuring several others.
'An attack on any of our member states is an attack on us all, ' said President of the European Commission, Jean-Claude Juncker following Friday's attack. Attacker Mohamed Lahouaiej Bouhlel, who claimed allegiance to the Islamic State group, was killed by police.
The parliament building, which lies further down the pedestrian street Drottninggatan, was in lockdown. The auto bomb never went off, and Abdulwahab died when one of his devices exploded among panicked Christmas shoppers.
The incident in Sweden comes after trucks were used in terror attacks in Nice and Berlin a year ago and just two weeks after Muslim convert Khalid Masood ploughed his auto into pedestrians on Westminster Bridge in London.
Just last month, a man drove a vehicle at high speed into pedestrians on London's Westminster Bridge before stabbing a policeman guarding the Parliament building.
A Berlin Christmas market was the target of an Islamist terrorist attack in December, resulting in the deaths of 12 people.