A man has been found decapitated at a factory on Friday morning near Grenoble, France, while two flags, both with Arabic inscriptions, were discovered at the scene.
A security official said a severed head was left on the gate at the site in southeastern France after the terror attack. The two banners, one white and one black, were found nearby.
The attack apparently began mid-morning when a car was crashed into the factory in Saint-Quentin-Fallavier, hitting gas canisters and touching off the explosion.
The official, who spoke on condition of anonymity because he was not authorized to release details to the media, said the body's torso was found near the site of the explosion but that the victim was not decapitated by the blast.
A man was arrested at the scene. A French official has named him as Yassine Salhi, who is in his 30s and was a resident of the Lyon suburb of Saint-Priest. The victim is believed to have been the suspect's boss and a local businessman, according to officials.
French Interior Minister Bernard Cazeneuve said the main suspect had been flagged in 2006 for suspected ties to radical Salafists. Cazeneuve said the suspect had been known to intelligence services, who had him under surveillance from 2006-08.
French authorities picked up two people from Salhi's apartment on Friday afternoon. Another anonymous security official said one of those detained was Salhi's wife.
French President Francois Hollande has confirmed that one person was killed and two were wounded in the incident. Hollande added that there was "no doubt about the intention — to cause an explosion," and described the attack "of a terrorist nature."
In a statement, France's anti-terror prosecutor said an investigation was opened into the attack, which he said was carried out by "a terrorist group."
The factory attack came on the same day as a gunman mowed down scores of tourists on a beach in Tunisia and a suicide bomber killed over two dozen worshippers at a Shiite mosque in Kuwait. All three attacks were condemned by the United Nations, the United States, Israel, and others.
Agence France-Presse quoted a legal source claiming that Arabic writing was also found on the severed head pinned to the factory gates and that the French prime minister has tightened security at "sensitive sites."
The industrial site belongs to Air Products, an American chemical company based in Allentown, Pennsylvania. According to local newspaper Le Dauphiné Libéré, the explosion took place at 9.50am (local time) at the factory. The decapitated man and another injured man are not Air Products employees according to the paper.
France went on high alert after attacks in January that left 20 people dead in the Paris region, including the Islamic extremist attackers.
Hollande announced that he was leaving a European Union summit in Brussels to travel back to France. Troops had been deployed, he said, and "all measures are being taken to prevent any other tragedy and to prevent any other action."
While a suspect has been "arrested and identified," Hollande said that "there is an ongoing investigation." After saying his thoughts were with the victim, he continued: "There is a lot of emotion, but emotion cannot be the only answer. It is action, prevention, deterrence, and… the necessity to never give in to fear."
The French president added: "It is about protecting our people while identifying the truth."
The scene outside the factory. Video via Le Dauphiné Libéré.
Image via Google Streetview
The Associated Press contributed to this report.