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Terror has once again broken out in Europe, sending German city Munich into lockdown following a mass shooting in a shopping centre.

Ten people are dead, including the attacker, and 21 others were injured. Children are among the killed and wounded. Eyewitnesses say they saw the attacker deliberately targeting helpless young children when he began unleashing on diners at a McDonald’s restaurant.

Police were investigating a fake Facebook advertisement offering free food at the exact McDonald’s the attack took place. It is uncertain whether the killer posted the ad to lure children into the fast food restaurant.

"I hear like an alarm and boom, boom, boom, I heard, and then I saw all the injured. I was back to back with him, I was in the bathroom with my kid, and I only saw him shoot directly into the faces of children," Lauretta Januze, who was with her young son at the time, told CNN.

"And he's still killing the children. The children were sitting to eat. They can't run."

She said she heard the gunman yell, "Allahu Akbar" (God is great). "I know this because I'm Muslim. I hear this and I only cry."

People were urged to avoid public spaces. A state of emergency was declared in the city, which is the capital of Bavaria and has a population of more than 1.88 million.

Video: Police guard crowds of people leaving #Munich mall shooting scene. https://t.co/HQov4iXdzx pic.twitter.com/L29u9C6v1z

— WPEC CBS12 News (@CBS12) July 22, 2016

The mass shooting follows a string of attacks including the attack in the southern French city of Nice on 14 July and bombings in neighbouring France and Belgium.

What we know so far:

GRAPHIC: #Munich gunman opens fire on crowd https://t.co/wC0Fi3iD4E pic.twitter.com/3PkkbP0NYM — RT (@RT_com) July 22, 2016

Policemen in action at the Olympia Einkaufzentrum in Munich, Germany. (Photo by Joerg Koch/Getty Images)

What we don't know yet:

The German Embassy issued the following tweet after lowering their flags to half-mast.

Australia's response:

Prime Minister, Malcolm Turnbull, has issued a statement on Facebook regarding the shooting in Munich, alleging mental illness has played a key role in many of the past attacks.

"Increasingly, the threat is from lone attackers who become radicalised with little direct contact or prior affiliation with known terrorist organisations," the PM posted.

"Though investigations continue, the perpetrators of recent attacks in Orlando, Nice and Germany all appear to have showed signs of mental illness and social dysfunction."

In response to the attacks, the Prime Minister has asked the Counter Terrorism Coordinator to review the trends of mental health and "disturbed behaviour" have with terrorism. In addition, Australia may modify their intelligence and security agencies if any correlations are found.

"The use of trucks and other vehicles also demands a review of the protection available at public places where large numbers congregate and to which vehicles would ordinarily have access.

"We will continue to ensure our security agencies are responsive to changing circumstances, identifying threats as they emerge and keeping Australians safe as they go about their daily lives and enjoy their freedoms."

Police information line - 089 2910 1910 Number for missing persons - 0800 77 66 350