Beheading, explosion at locally-owned factory in France

SAINT-QUENTIN-FALLAVIER, France -- A man with suspected ties to French Islamic radicals rammed a car Friday into an American gas factory in southeastern France, triggering an explosion that injured two people, officials said. The severed head of a local businessman was left hanging at the factory's entrance, along with banners with Arabic inscriptions, they said.

The gas factory belongs to Air Products, an American chemical company based in Trexlertown, Pennsylvania. The company said all its employees had been accounted for and evacuated but did not say if any had been wounded.

"The site is secure. Our crisis and emergency response teams have been activated and are working closely with all relevant authorities," the company said in a statement.

France immediately opened a terrorism investigation.

"Islamist terrorism has again struck France," Prime Minister Manuel Valls said.

The attack began shortly before 10 a.m. when a car made it through the gate of the gas factory in Saint-Quentin-Fallavier, southeast of Lyon. The car then plowed into gas canisters, touching off the blast, said President Francois Hollande said, speaking in Brussels.

"No doubt about the intention - to cause an explosion," Hollande said, calling the attack "of a terrorist nature."

No group immediately claimed responsibility for the attack. The severed head at the factory's entrance appeared to be an echo of the Islamic State group's practice of beheading prisoners and displaying their heads for all to see. A security official said two flags - one white and one black, both bearing Arabic inscriptions - were found nearby.

French Interior Minister Bernard Cazeneuve said a man from the Lyon region who had been flagged in 2006 for suspected ties to extremists was seized by an alert firefighter. Other people, including the man's wife, were also taken into custody after the attack that also included a severed head left at the factory gate and the victim's body elsewhere on the premises, a security official said.

"People who could have participated in this abject crime are in custody," Cazeneuve said.

Cazeneuve said the suspect had been known to intelligence services, who had him under surveillance from 2006-08.

France's anti-terror prosecutor said an investigation was opened into the attack, and potential charges including plotting as part of "a terrorist group." It was not clear if French authorities were searching for any more possible accomplices.

The French security official said the decapitated victim was as a businessman, head of a local transportation company, who was believed to have been killed before the explosion. His name is not released. The official was not authorized to speak to the media and requested anonymity.

Cazeneuve said Friday that security has been heightened at religious sites around the country.

Hollande spoke after watching TV news reports about the attack with German Chancellor Angela Merkel as both attended a European Union summit in Brussels.

France went on high alert in January after attacks against the satirical newspaper Charlie Hebdo, a kosher grocery store and a policewoman that left 20 people dead in the Paris region, including three Islamic extremist attackers.

Since then, fears of copycat attacks have risen. One person was arrested in April after authorities said he was plotting to gun down people in churches in the Paris region.