Decapitated body found in terrorist attack in France

There were no immediate assertions of responsibility or possible motives given for the violence in an industrial park near Lyon, but officials immediately explored possible ties to Islamist militants in France or wider terror networks.

In Tunisia, meanwhile, gunmen opened fire at a tourist beach resort, killing more than three dozen people in another blow to the country's vital tourism industry. Counterterrorism officials around the world have been on higher alert for possible stepped-up attacks during the Muslim holy month of Ramadan and the anniversary of the Islamic State's declaration of a caliphate.

French authorities said two flags bearing Arabic inscriptions were found at the scene beside the severed head. France's interior minister, Bernard Cazeneuve, said a suspect arrested — identified by French officials as Yassin Sahli, 35, a driver and father of three from the Lyon suburb of Saint-Priest — was on a watch list between 2006 and 2008 of potential followers of a radical branch of Islam, but had been taken off surveillance.

Paris Prosecutor Francois Molins said at a news conference in the capital that three other people were also arrested: Sahli's wife and sister, both picked up at his home, and another person suspected of unspecified "criminal association." The local Dauphine Libéré newspaper reported that the alleged accomplice was detained at his home in Saint-Quentin-Fallavier, about 20 miles southeast of Lyon, near the industrial park targeted in the attack.

However, Molins said there was no evidence that any accomplice entered the plant with Sahli.

"It's a pure terrorist attack, especially in as much as a corpse has been found, decapitated with a message," said French President Francois Hollande, who summoned security officials to an emergency meeting.

Hollande said the French national security alert system would move to high alert for the next three days in the Rhone-Alpes region of southeastern France, where the attack took place.

Molins said a commercial vehicle that regularly made deliveries at the plant entered the area without attracting attention because the driver, Sahli, was known to employees. The vehicle then sped up and smashed into a covered shed containing cylinders of industrial gas and acetone, Molins said.

Cazeneuve said the crash touched off an explosion, injuring several people.

According to Molins, firefighters responding to the blast caught Sahli in another shed as he was trying to open acetone cylinders.

Molins said the headless body of Sahli's boss, identified only as the 54-year-old CEO of a transportation company that had employed Sahli since March, was found next to the vehicle, along with a knife.

The severed head was placed on a post at the entrance to the compound, operated by Air Products, a gas and chemical company based in Allentown, Pa.

According to RTL radio, Sahli was the subject of two French intelligence reports in 2013 and 2014. While residing in Besancon in eastern France, he sought to create a Muslim institute with two friends who were "classified as extreme Muslims," RTL reported. In 2014, some neighbors reported to authorities that he was showing signs of radicalization. He would "host meetings at his house with other men who would sometimes wear military clothing and talk about jihad," RTL said.

In Saint-Priest, where Sahli lived with his family in a four-story apartment building, neighbors said he kept to himself and did not display any outward signs of radicalism.

"He didn't seem to be taking too much care about his kids; his wife would be doing all the work," said one neighbor, Jamel Khablech.

"Thank God I never got in any trouble with this man," Khablech added. "Who knows what could have happened then."

Air Products officials did not immediately return calls seeking comment. But a Twitter message from the company said "emergency response teams have been activated." A separate statement said all of the firm's employees at its plant at L'Isle-d'Abeau were accounted for, but it did not say if any were among the injured.

In a subsequent statement, Air Products said: "Emergency services are on site and have contained the situation. All individuals working at the site have been evacuated. The site is secure." It added that security has been increased "as a precautionary measure" at its locations around the world.

"We have no doubt that attack was to explode the building," said Hollande, who cut short a European Union summit in Brussels to return to France.

Meanwhile, security forces were dispatched to "all sensitive sites" in the region, said France's prime minister, Manuel Valls, who was traveling in South America.

French Defense Minister Jean-Yves Le Drian told workers during a visit to another factory that he had to cut his visit short because "unfortunately, another terrorist attack has just occurred," the French daily Le Figaro reported.

In January, Islamist gunmen killed 17 people in a series of attacks that began with an assault on the Paris-based satirical newspaper Charlie Hebdo.