A van ploughed into a crowd of people in Barcelona near Las Ramblas, an area popular with tourists.
At least 13 people were killed, and more than 100 were injured.
Catalan Police said two suspects have been arrested and they are treating the incident as an act of terrorism.
The ISIS terror group claims attackers as "soldiers of the Islamic State" but it has not explicitly claimed responsibility for attack.
Spain’s Prime Minister Mariano Rajoy said the Barcelona terror attack was “jihadi terrorism.”
Police are still searching for the van driver in the attack after he fled his vehicle.
CNN reporter said there was a “tangle of bodies” at the scene.
Terrified tourists were seen fleeing as the van smashed its way through street furniture and pedestrians, in an attack chillingly similar to those in London this year, and in Nice in southern France a year ago.
There are conflicting reports about whether a second van was used as a getaway vehicle, and police are searching shops and nearby streets, and have set up roadblocks around the city.
The Metro stations in Barcelona have also been closed.
While gunshots were reported in a nearby department store, police said there had been no exchange of fire.
ISIS affiliates is claiming responsibility on the Barcelona Attack.
Los terroristas nunca derrotarán a un pueblo unido que ama la libertad frente a la barbarie. Toda España está con las víctimas y familias MR
— Mariano Rajoy Brey (@marianorajoy) August 17, 2017
Spanish Prime Minister Mariano Rajoy tweeted: “In contact with all administrations. Priority: tend to the injured in Las Ramblas and facilitate the work of security forces.”
US President Donald Trump has tweeted that The United States condemns the terror attack in Barcelona, Spain, and will do whatever is necessary to help.
The United States condemns the terror attack in Barcelona, Spain, and will do whatever is necessary to help. Be tough & strong, we love you!
— Donald J. Trump (@realDonaldTrump) August 17, 2017
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