French Interior Minister Bernard Cazeneuve has arrived at the scene of a terror attack that targeted a factory near Grenoble in southeastern France.

At least one person was killed and several others were injured in the attack earlier Friday. According to local reports, a Daesh flag was found at the site.

France's senior anti-terrorism prosecutor has officially taken the case as it emerged that the arrested man was known to French intelligence services.

The decapitated body of a man was found on the premises.

The victim was an employee at the factory. His head was discovered by police perched on the fence outside the factory, covered in Arabic writing.