Paris District attorney François Molins informed press reporters the night's bloodshed, where authorities validated an enemy wielding a knife killed a single person, is now being examined to figure out whether it was an act of fear.
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The father and mother of the attacker are being held for questioning by French police, the source said.
"I was working in the restaurant and suddenly I heard a woman screaming ... he came and attacked her", said Jonathan, a witness working nearby who wouldn't provide his last name.
French police officers pass next to the place where a man stabbed several people Saturday night in Paris before he was shot dead by police.
French Prime Minister Edouard Philippe said police were on the scene "within five minutes" of the attack and that some nine minutes later the assailant was dead, he added.
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Since 2012, hundreds of people have died in a series of terrorist attacks across France featuring explosives, firearms and vehicular ramming. Witnesses described for French media how they saw the assailant running towards police officers who shot him.
Two of the wounded in the attack are in a serious condition but do not have life-threatening injuries.
The source did not say what the attacker's nationality was.
A witness who was sitting in a Japanese restaurant with his girlfriend told Le Parisien: Just before 9pm, we saw people rushing inside the restaurant screaming that a man was outside with a bloody knife. The statement also said the assailant acted in response to calls to attack anti-ISIS coalition countries.
"Given the modus operandi, we have turned this over to the counterterrorist section of the Paris prosecutor's office", Mr Molins told reporters from the scene. He tweeted, "My first thoughts are for the victims in this odious attack".
Paris Mayor Anne Hidalgo tweeted (in French): "Tonight, our city was bruised".
Counterterrorism authorities are leading the investigation of the attack.