One person has been found decapitated and at least two others have been wounded in what officials are calling a “terrorist” incident at a gas factory in South eastern France.

Reports monitored on Al-jazeera quoted French President Francois Hollande, as saying in Brussels that one person was killed and two persons injured in the incident, which began shortly before 10am local time on Friday when a car crashed the gate and ran into gas canisters, causing an explosion.

A security official said a severed head was found posted on the gate at the entrance to the factory, located in Saint Quentin Fallevier, about 30 kilometers South east of Lyon.

Two flags, one white and one black, both with Arabic inscriptions, were found nearby, a security official told the AP news agency.

“The attack was of a terrorist nature since a body was discovered, decapitated and with inscriptions. As I speak, there is one fatality and two injured,” said President Hollande.

He added that one suspect has been arrested and that a second attacker may have been involved.