French President Francois Hollande says attack in France was of 'a terrorist nature'

French President Francois Hollande said on Friday that an attack that morning in southeast France was of "a terrorist nature" and that a suspect had been arrested and identified.

"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," Hollande told a news conference in Brussels, where he was attending an EU summit.

He added that a considerable police force had been deployed in the region and other industrial sites protected to avoid any further incidents.

Two assailants rammed a car into the premises of a US gas company in southeast France on Friday, exploding gas containers.

A decapitated head covered in Arab writing was found at the site.

UK Prime Minister David Cameron spoke to President Francois Hollande to convey his sympathies over what a British government source said appeared to be an appalling incident at a gas factory in France.

"The Prime Minister has just spoken to President Hollande to express his sympathies for what looks like an appalling incident there," the source said.

"It clearly looks an extremely concerning situation and our thoughts are with all those affected by it."