SAINT-QUENTIN-FALLAVIER, France — A man once flagged for ties to French Islamic radicals rammed a vehicle Friday into an American-owned gas factory in southeastern France, triggering an explosion that injured two people, officials said. The severed head of his employer was left hanging at the factory’s entrance, along with banners with Arabic inscriptions, they said.

France immediately opened a terrorism investigation.

“Islamist terrorism has again struck France,” Prime Minister Manuel Valls said.

The attack began shortly before 10 a.m. when the vehicle made it through the gate of the gas factory in Saint-Quentin-Fallavier, southeast of Lyon. The vehicle then plowed into gas canisters, touching off the blast, President Francois Hollande said in Brussels, where he was attending a European Union summit.

“No doubt about the intention – to cause an explosion,” Hollande said, calling the attack “of a terrorist nature.”

The French president later raised the security alert for the southeastern region to its highest level for the next three days.

No group immediately claimed responsibility for the attack. The severed head at the factory’s entrance appeared to mimic the Islamic State group’s practice of beheading prisoners and displaying their heads for all to see. The man’s body was found elsewhere on the grounds.

A security official said two flags — one white and one black, both bearing Arabic inscriptions — were found nearby.

French Interior Minister Bernard Cazeneuve said the main suspect — a man from the Lyon region who had been flagged in 2006 for suspected ties to radical Salafists — was seized by an alert firefighter. Cazeneuve said the suspect had been known to intelligence services, who had him under surveillance from 2006-08.

A French police official told The Associated Press that man in custody, Yassine Salhi, is a 30-something resident of the Lyon suburb of Saint-Priest.

Three French officials said the decapitated man ran a local transportation company that employed Salhi. The victim’s name was not released. One official said he was believed to have been killed before the attack on the factory and was not killed by the explosion. The officials were not authorized to speak to the media and requested anonymity.

Other people, including Salhi’s wife, were seen on live television being taken into custody by police from his apartment building in Saint Priest hours after the attack.

“People who could have participated in this abject crime are in custody,” Cazeneuve said, adding that security was also tightened Friday at religious sites around the country.

Still, French authorities did not say exactly how many people were taken into custody or if they were searching for more possible accomplices. Hollande said the key question was to determine whether there were any accomplices.

No further details were released about the two people injured in the explosion.

The gas factory belongs to Air Products, an American chemical company based in Allentown, Pennsylvania. The company said all its employees had been accounted for and were evacuated from the premises but did not say if any had been injured.

“The site is secure. Our crisis and emergency response teams have been activated and are working closely with all relevant authorities,” the company said in a statement.

Air Products makes gases used by a wide range of industries, including food production, medicine and the oil and gas. It has more than 20,000 employees in 50 countries, mostly in the Americas, Europe and Asia.

The French security official said the suspect apparently miscalculated about how explosive the chemicals he smashed into would be. Hollande said a major explosion appeared to be the goal.

Security officials say they are increasingly worrying as much about disaffected people attacking alone or in pairs after becoming inspired by jihadi propaganda online as they do about attacks organized by terror groups.

France went on high alert in January after attacks against the satirical newspaper Charlie Hebdo, a kosher grocery store and a policewoman that left 20 people dead in the Paris region, including three Islamic extremist attackers.

Since then, fears of copycat attacks have risen. One person was arrested in April after authorities said he was plotting to gun down people in churches in the Paris region.