At least two people were shot dead on a street in the German city of Halle on Wednesday, police said, with witnesses saying that a synagogue was among the gunmen's targets as Jews marked the holy day of Yom Kippur.
One suspect was captured but with a manhunt ongoing for other perpetrators, security has been tightened in synagogues in other eastern German cities while Halle itself was in lockdown.
"Early indications show that two people were killed in Halle. Several shots were fired," police said on Twitter, urging residents in the area to stay indoors.
Police said the "perpetrators fled in a car", adding later that one suspect had been caught.
Max Privorotzki, who heads the Jewish community in Halle, told Spiegel Online the perpetrators had apparently sought to enter a synagogue in the Paulus district but security measures in place helped to "withstand the attack".
He added that between 70 and 80 people were in the synagogue on a day when Jews around the world were marking one of the holiest days in the Jewish calendar.
Two people also suffered serious bullet wounds in the attack and were being operated on, a spokesman for the city's hospital said.
Hid in the toilet
Anti-terrorist prosecutors confirmed that they were taking over the probe given "the particular importance of the case" which he said involved "violent acts that affect the domestic security of the Federal Republic of Germany".
Bild daily reported that the shooting took place in front of the synagogue, and a hand grenade was also flung into a Jewish cemetery.
Witness Conrad Roessler told news channel NTV he was in a Turkish restaurant about 600 metres (yards) away from the synagogue when "a man wearing a helmet and military uniform" tossed a hand grenade.
"The grenade hit the door and exploded," he said. "(The attacker) shot at least once in the shop, the man behind me must be dead. I hid in the toilet and locked the door."
Police would not confirm the details, saying only that there were also kebab restaurants and churches in the area where the shooting took place.
An unauthenticated video circulating in German media showed a man wearing a helmet getting out of a vehicle before firing several shots in the air.
"It is terrible news from Halle and I hope very much that the police will manage to catch the perpetrator or perpetrators as quickly as possible so that no other person will be in danger," Chancellor Angela Merkel's spokesman Steffen Seibert told a news conference.
"It is terrible news from Halle and I hope very much that the police will manage to catch the perpetrator or perpetrators as quickly as possible so that no other person will be in danger."
Wednesday's shootings came three months after the shocking assassination-style murder of local pro-migrant politician Walter Luebcke in the western city of Kassel, allegedly by a known neo-Nazi.
Luebcke's killing has deeply shaken Germany, raising questions about whether it has failed to take seriously a rising threat from right-wing extremists.
Investigators have been probing the extent of suspect Stephan Ernst's neo-Nazi ties and whether he had links to the far-right militant cell National Socialist Underground (NSU).
Interior Minister Horst Seehofer last month warned of the rising danger of the militant far right, calling it "as big a threat as radical Islamism".
Seehofer said that police had uncovered 1,091 weapons including firearms and explosives during probes of crimes linked to the far right last year, far more than in 2017 when 676 were found.
Germany has also been on high alert following several jihadist attacks in recent years claimed by the Islamic State group.