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The car crashed into the busy market through an access lane for emergency vehicles at around 7:00 p.m. local time (18:00 GMT) on Friday, police said.
Eyewitnesses described jumping out of the car’s path, running away or hiding. Unverified images on social media showed the vehicle speeding across a pedestrian walkway between stalls.
Police said the driver then returned to the road and was forced to stop in traffic, where he was arrested.
According to city officials, about 100 police officers, medics and firefighters responded to the scene.
A 50-year-old man has been taken into custody on suspicion of five counts of murder, multiple attempted murders and dangerous bodily harm, police said.
The suspect has been identified in local media as Taleb al-Abdulmohsen, a Saudi-born psychiatrist who arrived in Germany in 2006.
The motive for the attack is still unclear, but authorities believe the driver acted alone.
German authorities are facing questions about security after reports that they were warned last year that the suspect could pose a threat.
The Saudi Foreign Ministry said it warned the German government about al-Abdulmohsen’s extremist views but received no response.
