Swedish police are investigating possible terror motives for an axe attack in which at least eight people have been injured, with the assailant arrested after being shot and wounded.

Some of the victims were in serious condition and the suspect, a man in his 20s, was hospitalised after his arrest, a police spokeswoman said on Wednesday (local time).

The man was previously known for minor crimes, she said.

“We have started a preliminary investigation of attempted murder but there are details in the investigation that make us investigate possible terror motives,” regional head of police Malena Grann told a news conference.

Police said the suspect attacked at least five different locations in Vetlanda.

“We heard a scream from the street. Then we saw a man enter the store, shouting that he had been stabbed,” Asa Karlqvist, owner of a florist shop, told local newspaper Vetlanda-Posten.

“Blood was pouring from his shoulder, so we got towels and applied pressure on the wound.”

The situation was under control and there were no indications anyone else was involved in the attack in the town of Vetlanda, 340 km south of the capital Stockholm.

Prime Minister Stefan Lofven condemned the incident.

“We confront such heinous acts with the combined force of our society,” he said in a statement, adding he was in constant contact with both police and the security service.

Police were alerted to the attack in Vetlanda, a town of around 13,000 people, around 3 pm and initially said it did not appear to be an act of terrorism.

In April 2017, a radical Islamist drove a truck into crowds of shoppers on a busy street in central Stockholm, killing five people before crashing into a department store.

He was arrested and later sentenced to life in prison.

-AAP