LONDON (CNN) -- [Latest developments]
• The U.S. chemical firm whose factory was attacked says all its employees are accounted for; the attack victim has not yet been publicly identified.
• The suspect is "somebody who was in touch with (Muslim fundamentalist) Salafists," French Interior Minister Bernard Cazeneuve said.
• The man had been under surveillance but was not previously involved in terrorist activities, he said.
• French authorities are "investigating any other people that could be accomplices," Cazeneuve said.
• French President Francois Hollande confirmed that the incident at a factory in southeastern France was a "pure terrorist attack."
• Hollande said a body had been found, along with a severed head with a message. He said a suspect has been arrested and identified.
One person has been beheaded and two people injured in a terrorist attack at a gas factory near Lyon in southeastern France, French President Francois Hollande said Friday.
The suspect's contacts with Muslim fundamentalists, and reports that Islamist flags or writings were found at the scene, point to an Islamist extremist motive.
The shocking incident comes on the same day as both Tunisia and Kuwait were hit by terrorist attacks, the latter an apparent blast at a Shiite mosque claimed by ISIS.
In Tunisia, at least 19 people were killed in the assault on a beachfront hotel in Sousse, Tunisia's interior minister said, according to the state-run TAP news agency.
In a televised address from a summit in Brussels, Belgium, Hollande called the French incident a "pure terrorist attack."
Hollande said a body had been found, along with a severed head with a message. A suspect has been arrested and identified, he said.
The victim of what Interior Minister Bernard Cazeneuve described as a "barbarous" attack has not yet been publicly identified. U.S. firm Air Products & Chemicals, which owns the factory, said all its employees were accounted for.
Cazeneuve, speaking at the scene of the attack, said the suspect, who was from the Lyon area, was "somebody who was in touch with (Muslim fundamentalist) Salafists."
An intelligence report was opened on the man in 2006 because of suspected radicalization, he said, but this was not renewed in 2008.
"He has been under surveillance, but he was not known as being involved in any terrorist act," Cazeneuve said. French authorities are "investigating any other people that could be accomplices," he added.
"The dangerous elements were neutralized immediately after the crime was committed," he said.
Cazeneuve said flags had been found at the site but that their text has not yet been translated. He did not specify what language was written on the banners.
The attack took place just before 10 a.m. (4 a.m. ET), Hollande said, when a vehicle was driven at high speed "by one individual, maybe with another individual" into the factory site and into a building housing gas canisters.
"There is no doubt that the intention was to provoke an attack, an explosion," he said.
Hollande expressed his condolences and solidarity with the people who were attacked.
Witness: Islamist flags
French news agency AFP earlier reported that a suspected Islamist attacker pinned a severed head covered with Arabic writing to the gates of the factory, in an industrial area in the small town of Saint-Quentin-Fallavier, between Lyon and Grenoble.
A source cited by BFMTV also said a severed head had been put in front of the company, next to which was found an Islamist flag. CNN has not been able to confirm the report independently.
A man described as a witness, whose name was given as Patrice, also told BFMTV that a group of men carrying Islamist flags forced their way into the factory, beheaded a person and targeted gas tanks.
Le Monde newspaper cited unidentified sources as saying that two people rammed a vehicle into the building, causing the explosion. Banners in Arabic that haven't yet been examined were found at the scene, the paper added.
The Paris prosecutor's office said its anti-terrorism section was opening an investigation into the attack.
It is investigating possible murder and assassination attempts by organized gangs in relation to a terrorist enterprise; destruction and degradation resulting from explosive materials by organized gangs in relation to a terrorist enterprise; and terrorist conspiracy to commit crimes against people, the Paris prosecutor's office said in a statement.
Security stepped up
Air Products & Chemicals said in statement that its priority was to take care of its employees, "who have been evacuated from the site and all accounted for."
Emergency services have contained the situation, the company said. "The site is secure. Our crisis and emergency response teams have been activated and are working closely with all relevant authorities."
A spokeswoman for the company, Nicola Long, earlier said there had been an explosion and a fire that was extinguished.
She was not able to give any information on any deaths or injuries. The company supplies gases for industrial use.
Security has been heightened in France since an Islamist terror attack in January, when attackers targeted the satirical Charlie Hebdo magazine and a kosher supermarket in Paris.
CNN's Sandrine Amiel, Sarah Oulahna and Alanna Petroff contributed to this report.