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Witnesses have described horrific scenes after the driver of a large truck mowed down hundreds of people at Bastille Day celebrations in Nice.
France's Interior Minister Bernard Cazeneuve says his country is "in a war with terrorists" following the attack which killed 84 people and injured many more.
By-stander Ismali Khalidi said parents threw their children over walls to safety, as the truck rammed through the crowd.
"I have never seen that level of chaos and hysteria and terror and a total lack of information about what's going on," he told The Guardian
"We saw a guy basically throw his kids over a fence and then jump after them."
Video posted to YouTube shows people scrambling for cover inside a building as the attack takes place
Sophie Sanderlands, a tourist from Australia in Nice when the attacks occurred, told Channel Seven in Australia the crowd was out of control.
"There was live music, people everywhere, really happy mood, nothing was out of place, and then all of a sudden thousands of people just started running towards us screaming, crying, absolutely out of control we sort of had no choice but to start running with them," she said.
The driver in the truck attack has been identified as a 31-year-old French-Tunisian man, after his ID card was found in the truck, reports say.
Francois Hollande, the French president, has described the attack as a "monstrosity" and said soldiers would be deployed to support gendarmes and police.
Heartbreaking images show people enjoying the celebrations before the terror attack
France is still under an official state of emergency following November's Paris attacks that killed 130 people.
Mr Hollande announced that the state of emergency, which was supposed to end on 26 July, will be extended by three months.
"Nothing will lead us to give in to our will to fight against terrorism," he said. "We are going to strengthen our efforts in Syria and Iraq against those who are attacking us on our very soil."
The crowds were celebrating France's national day in the southern French city. Witnesses say the driver targeted the area where the crowd was thickest. The truck carried on for two kilometres before stopping.
The French Interior Ministry says the attacker was then "neutralised", and an investigation will determine if he acted alone.
No group has claimed responsibility for the attack, but supporters of Islamic State are celebrating on social media.
"The number of those killed had reached 62 french crusaders and sinful infidels in Nice, France.. God is great, God is great," read one tweet.
Nice's mayor Christian Estrosi has announced that a Rihanna concert planned for Friday night and a jazz festival due to open on Saturday have been cancelled.
US President Barack Obama said in a statement: "On behalf of the American people, I condemn in the strongest terms what appears to be a horrific terrorist attack in Nice, France, which killed and wounded dozens of innocent civilians."
Nice Matin journalist Damien Allemand, who was at the scene, said the fireworks display had finished and people were leaving when they heard a noise and cries.
"A fraction of a second later, an enormous white truck came along at a crazy speed, turning the wheel to mow down the maximum number of people," he said.
"I saw bodies flying like bowling pins along its route. Heard noises, cries that I will never forget."
One woman told France Info she and others had fled in terror: "The lorry came zig-zagging along the street. We ran into a hotel and hid in the toilets with lots of people."
Another woman told the station she was sheltering in a restaurant on the promenade with some 200 other people, where things had calmed down about two hours after the incident.
Nice Matin quoted its reporter at the scene saying there were many injured people and blood on the street.
It published a photograph of a damaged, long-distance delivery truck, which it said was riddled with bullets, and images of emergency services treating the injured.
Social media carried images of people lying apparently lifeless in pools of blood.
New Zealand Prime Minister John Key, currently visiting in Paris, has shared his condolences.