A man with a knife killed two people and wounded at least six in a stabbing rampage in a market square in the Finnish city of Turku.
Police shot the suspected attacker in the leg and arrested him on Friday.
They said they had yet to establish the identity of the man who appeared to be of foreign origin, or his motive.
They warned people to stay away from the city and reinforced security nationwide, with increased patrols and more surveillance, in case more people were involved.
Speaking to CNN, Kent Svensson, 44, said "people were running everywhere".
"This guy had this huge knife in his hand - and several times he was stabbing this person," he said. "This guy was just constantly stabbing. He was just turning around, flinging his knife everywhere. There were people lying everywhere."
"We were just talking about what happened in Barcelona," he said. "We thought we were safe in Finland. And then this happens.
"The woman was on the ground. She was dead. It's just awful," he said.
People were allowed to return to the city centre a few hours later.
"At this stage, there is only one suspect and we are investigating whether there are more people involved ... but it looks likely (he was alone)," said Markus Laine from the National Bureau of Investigation.
"At this stage, we do not investigate this (as a terrorism attack) but the possibility has not been ruled out," he told a news conference.
"We can not exclude the events being linked to international terrorism," Chief of police Seppo Kolehmainen said. "We have a heightened awareness level of terrorism currently but we did not have any specific threats to act upon."
Interior Minister Paula Risikko said: "We have not been able to confirm the person's identity ... we have been in contact with the immigration service as the person looks like a foreigner."
Eyewitnesses described the panic at the scene.
"A man walked towards the ice cream stand where I work, and he hit a woman three times. He started running, went past my kiosk, and he had a knife in his hand," Terttu Lehtinen told Reuters.
She said that some other men ran behind, apparently chasing him.
"We were sitting by the market square, just enjoying the afternoon. Suddenly people started screaming and yelling, they were hysterical," said another witness, who gave her name only as Reetta.
"We started running towards our car and, as we got there, my boyfriend said a woman had been stabbed several times in the neck," she told Reuters.
The six wounded were taken to hospital, police said.
Prime Minister Juha Sipila said: "My deepest condolences to the families and close-ones of the Turku victims. The events of the day are shocking us all."
He added that the government would meet later.
Finland is usually peaceful but the Security Intelligence Service raised the terrorism threat level in June, saying it had become aware of terrorism-related plans in Finland.