Dutch Prime Minister Mark Rutte cancelled a meeting with his ruling coalition and was being briefed on the situation, officials said.

    Police later said that "a possible terrorist motive is part of the investigation".

    The head of the Dutch national counter-terrorism service, Pieter-Jaap Aalbersberg, said on Twitter that he was having "crisis consultations" over the incident.

    "NCTV is monitoring the situation in #Utrecht. In close contact with local authorities. We cannot rule out terrorist motive. Crisis team is activated," he said.

    "Offender still fugitive," Aalbersberg said, adding that the terror threat level had been raised to the maximum of five in Utrecht for the next 18 hours.

    Armed police surround tram   

    Local media showed photographs of masked, armed police and emergency  vehicles surrounding a tram that had stopped near a road bridge.

    Tram traffic in the area was halted, operator Qbuzz was quoted as saying by the ANP news agency.

    The Netherlands has been largely spared the kind of attacks which have rocked its closest European neighbours in the past few years, but there has  been a series of recent scares.

    In August, a 19-year-old Afghan with a German residence permit stabbed and injured two American tourists at Amsterdam's busy Central Station before being shot and wounded.

    In September, Dutch investigators said they had arrested seven people and foiled a "major attack" on civilians at a major event in the Netherlands.

    They said they had found a large quantity of bomb-making materials including fertiliser likely to be used in a car bomb.

    The men were arrested in the cities of Arnhem and Weert.

    In June, two terror suspects were arrested while close to carrying out attacks including at an iconic bridge in Rotterdam and in France, prosecutors said.

    The men aged 22 and 28, who were of Moroccan origin, made a film at the Erasmus bridge in which they sang a martyrdom song, they said.