Two people have died in a shooting near a synagogue in Germany.

Police, who urged locals to stay inside, said two people were dead and that one person has been arrested.

The Mayor of Landsberg, where police confirmed more gunfire was heard, said the suspects hijacked a car and were on a motorway that leads to Munich.

The nearby train station in the eastern city of Halle has closed.

German newspaper The Bild is reporting that a hand grenade was thrown in Halle and that the attack happened in front of a synagogue.

Witness Conrad Roessler was interviewed on German TV channel N-TV - and said he saw a man with a helmet and military jacket who fired shots into the kebab shop the witness was in.

Mr Roessler said the man threw something that looked like a grenade and it rebounded off the doorframe.

"All the customers next to me ran, of course I did too. I think there were five or six of us in there," said Mr Roessler, who hid in the toilet.

"The man behind me probably died."

He added: "I locked myself quietly in this toilet, and wrote to my family that I love them, and waited for something to happen."

The head of Halle's Jewish community, Max Privorotzki, told news magazine Der Spiegel there were up to 80 people inside the synagogue when the shooting occurred.

He said security was in place at the synagogue.

Policemen and rescue workers standing in a street in Halle, Germany | Image: Sebastian Willnow/DPA/PA Images

Police have not commented on whether the shots fired in Landsberg, about 10 miles from Halle, were linked to the attack.

A video broadcast by German TV channel MDR showed a man in a helmet and an olive-coloured top stepping getting out of a car.

The man goes on to fire four shots from a long-barreled gun.

German Chancellor Angela Merkel's spokesman, Steffen Seibert, lamented what he called "terrible news from Halle".

The European Parliament held a moment of silence at the start of its session Wednesday to mark the unfolding situation in Halle.

Tuesday marked the start of Yom Kippur, the holiest day of the year in Judaism.