One person has died and several are wounded following a knife attack at a town market in eastern France, in what French authorities have described as an act of terror.

One person has been killed and five police officers injured in a knife attack in the eastern French city of Mulhouse. A 37-year-old Algerian man was arrested at the scene and the prosecutor has opened a terrorist inquiry because the suspect reportedly shouted "Allahu Akbar", or "God is great".

On Saturday, a 37-year-old Algerian national killed an elderly Portuguese man and injured five police officers with a knife before being arrested in the French eastern city of Mulhouse. Forensic experts say the man was diagnosed with schizophrenia.