An attacker with suspected ties to French Islamic radicals rammed a car into a gas factory Friday in southeastern France, and a severed head was staked on a post at the entrance, officials said. France immediately opened a terrorism investigation.

Two people were injured, authorities said.

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

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

French Interior Minister Bernard Cazeneuve said a man who had been flagged in 2006 for suspected ties to extremists was seized by an alert firefighter, one of multiple people in custody after the attack. He said authorities were trying to identify the victim whose severed head was posted at the factory's entrance.

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

Cazeneuve said the suspect had been known to intelligence services, who had him under surveillance from 2006-08. The man is from the Lyon region, he said.

A severed head was found staked on a gate at the factory's entrance, in what appeared to be an echo of the Islamic State group's practice of beheading prisoners and displaying their heads for all to see. An official said two flags — one white and one black, both with Arabic inscriptions — were found nearby.

The official, who spoke on condition of anonymity because he was not authorized to release details to the media, said the victim was not decapitated by the blast.

Three French officials say the decapitated victim was the suspect's employer. The officials, who spoke on condition of anonymity because the investigation was ongoing, said the victim was believed to have died before the suspect got a car through the factory's gates and rammed into gas canisters Friday morning. That triggered an explosion that officials say injured two people.

A French police official says the man in custody, Yassine Salhi, is a resident in his 30s of the Lyon suburb of Saint-Priest. Police have not named his employer but say he is the head of a local transportation company.

The French President announced later that he was raising the security alert to the highest level for three days in the southeastern region. Hollande spoke after a high-level security meeting Friday afternoon, hours after the attack on the factory. French police say they have the main suspect in custody, along with the suspect's wife and others. Hollande says the key question is to determine whether there were any accomplices.