UPDATE 11 AM: A man has been arrested after a truck crashed into a crowd in central Stockholm, killing four people and injuring 15 others in what Sweden’s Prime Minister said appeared to be a terrorist attack.

As parts of the Scandinavian nation’s capital city were evacuated, witnesses reported hearing shots and Prime Minister Stefan Löfven tweeted his country was under attack in what appeared to be a terrorist incident.

An Australian tourist has described witnessing the stolen truck ploughing through the crowd.

“I turned around and saw a big truck coming towards me. It swerved from side to side. It didn’t look out of control, it was trying to hit people,” Glen Foran, an Australian tourist in his 40s, told Reuters after Friday’s attack.

“It hit people, it was terrible. It hit a pram with a kid in it, demolished it,” he said.

“It took a long time for police to get here. I suppose from their view it was quick, but it felt like forever.”

Part of central Stockholm was cordoned off and the area was evacuated, including the main train station. All subway traffic was halted on orders from the police.

The stolen brewery wagon stands embedded in what had been the department store’s entrance.

The identity of the detained man has not been disclosed and police are not confirming whether he is the suspected driver.

Swedish Prime Minister Stefan Lofven said all indications pointed to an “act of terrorism”.

“Sweden has been attacked,” Mr Lofven said on Twitter.

“Be vigilant, and listen to the police information.”

Police earlier released a grainy CCTV photo of a man they wanted to question.

Swedish broadcaster SVT said shots were fired during the attack and people in the area were reportedly seen fleeing the scene.

“I saw at least three dead, but probably more,” Swedish radio reporter Martin Svenningsen said.

“We stood inside a shoe store and heard something … and then people started to scream,” witness Jan Granroth told local media.

“I looked out of the store and saw a big truck.”

Local media reported that several people were rushed away in ambulances, and live television footage showed smoke coming out of the department store as the truck’s cabin burned.

A Government source told Reuters all Swedish Government offices had been closed.

– with ABC and AAP