At least two people have been killed, including a small child, and dozens of others have been injured following the incident in Magdeburg, according to local officials.
They say the suspect is a 50-year-old Saudi doctor who first came to Germany in 2006.
Here’s what we know so far:
Initial response
The incident took place at the Christmas market in the city of Magdeburg, which is around 100 miles to the west of the German capital Berlin.
The city is the state capital of Saxony-Anhalt and has a population of about 240,000.
Police were called to the market shortly after 7pm.
In their initial report, posted on X, they wrote: “Extensive police operations are currently taking place at the Magdeburg Christmas market.
“The Christmas market in the city centre is closed. Further reports will be made.”
Footage emerges
Videos posted on social media later showed a large police presence at the scene.
A recording of CCTV footage, which Sky News has not yet been able to verify, later appeared to show a black vehicle being driven into people at the market.
Another appeared to show people injured on the ground with people attempting to help them.
Footage taken from a balcony near the scene then emerged, appearing to show a man being led away and detained by police.
How many people have died?
The number of dead and injured remains unclear – though the state premier of Saxony-Anhalt, Reiner Haseloff, said two people had died and at least 68 had been injured.
One of those who died was a small child, he said.
Earlier, deputy mayor Regina-Dolores Stieler-Hinz said one person had died and more than 50 people were injured, German news agency dpa reported.
A city spokesman said all hospitals in Magdeburg were preparing for a “mass casualty event”.
What about the suspect?
Saxony-Anhalt’s interior minister, Tamara Zieschang, told reporters that the suspect is a 50-year-old Saudi doctor who first came to Germany in 2006.
German outlet Welt, quoting security sources, also reported that the suspect was a man from Saudi Arabia.
Meanwhile, dpa, quoting security sources, reported that the man was not previously known to security services.
What has the response been in Germany?
Politicians and top government figures in Germany have shared their grief following the incident.
German chancellor Olaf Scholz wrote on the X social media platform: “My thoughts are with the victims and their families.
“We stand by their side and by the side of the people of Magdeburg. My thanks go to the dedicated rescue workers in these anxious hours.”
The country’s interior minister, Nancy Faeser, wrote on X: “The news from Magdeburg is deeply shocking. The emergency services are doing everything they can to care for the injured and save lives.
“Our thoughts are with the victims and their families. The security authorities will clarify the background.”
Vice chancellor, Robert Habeck, wrote: “What terrible news from Magdeburg, where people wanted to spend the Advent season in peace and community.
“My thoughts are with the victims and their families. I thank all the emergency services on site who are doing everything they can to help.”
Others from outside Germany also shared their condolences. In a post on X, Hungary’s prime minister, Viktor Orban, wrote: “We pray for the families of the victims.”