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.

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.

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".