Six people, including three children, were injured when a car mounted a kerb and ploughed into a crowd of people outside a sports centre in Newcastle.
It happened outside Westgate Sports Centre where an event was taking place to celebrate the end of Ramadan.
Two children are in intensive care and one adult is seriously injured.
Northumbria Police said the incident was not believed to be terrorism-related. A 42-year-old woman was arrested and is in custody.
The remaining injured are believed to have serious but non-life threatening injuries, officers said.
The woman who was arrested had been celebrating Eid with her family and hundreds of others.
No-one else was being sought. Extra patrols were in the area to reassure communities, police said.
One eyewitness said: "From what I understand, [a woman who had been at prayer] was about to leave in her car and I believe she lost control.
"I ran up straight away because everyone was moving in on all the injured, trying to put water in their mouths.
"The parents of the kids were there. I had to sort of try and calm them down just to tell them the ambulance is there and they will take care of it; they know what they're doing."
'Prayers for recovery'
Emergency services included six ambulances, two paramedic rapid response vehicles and the air ambulance.
In a statement, the nearby Newcastle Central Mosque said: "We pray and hope that all those affected recover soon fully.
"We thank the emergency medical services, the police and over 100 volunteers from the mosque for their quick response to the incident.
"We urge everyone to please pray for all those affected."
Chi Onwurah, Labour MP for Newcastle Central, tweeted: "So sad, I was at the prayers earlier & there were so much joy & unity. Thinking of those affected by what I am told was terrible accident."
'Everyone locked arms' - medical student Ahmad Ali
We were here for Eid. Everyone had just finished praying. The imam had finished his speech and everyone was talking to their families and getting some food.
Then we heard a commotion and screaming.
I ran up to the hill. A man got out of the passenger side. He seemed distraught.
Someone was trapped under the car and then everyone just pushed the car so they were free.
They were two children there, one of them - he was a boy about eight - was really badly injured,
There were about five doctors there so he had a lot of medical attention. We checked to see he had a pulse.
Everyone locked arms so there was a ring of locked arms around the injured people so they had space and the ambulances could get to them.
Everyone was distraught. I am very grateful it's not an attack.
It's very shocking to see a child injured like that. We are all hoping that he is fine, I just want to hear that.
Abdul Mahdoul, who was at the event, said: "We were wishing everyone happy Eid and suddenly we heard a lot of shouting and screaming. We didn't know what it was.
"People were panicking. The police did a great job to calm the situation down.
"It was a very happy atmosphere beforehand, but afterwards just chaos. I just wish for the people to recover very quickly."
Councillor Dipu Ahad said: "I hope there are no fatalities and my thoughts are with their families and other members who have been affected.
"We saw people crying and sobbing, it was like what you see in a horror movie, people were crying on the street, in corners.
"It was a real sad situation to see this and I think people were in confusion about what really happened.
"I had tears in my own eyes - it was a day of celebration for Muslims and others as well and it's a very sad situation and I hope this never happens again."
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