“One woman has been arrested and remains in police custody following reports of a stabbing in Barnsley town centre” in northern England, South Yorkshire Police said in a statement.
“One man suffered minor injuries. No other injuries have been reported at this time.”
Assistant Chief Constable Tim Forber said officers were “keeping an open mind as to the motivation”, adding that they were “receiving support” from a local counter-terrorism unit.
Market stall holder Terry Ellis told AFP he saw a woman with a “big knife, (measuring) about 12 inches” (30.5cm) running after a man and shouting “kill, kill, kill”.
Another trader, Abdul Razak, added: “This lady followed this man saying I’ll kill you, I’ll kill you.”
Other local traders said the stabbing, initially declared by police as a “serious incident”, caused the covered market and other parts of the town centre to be “locked down”.
Britain is on high alert after a string of deadly terror attacks, many involving knives.
Police were alerted at around 8.20am (0720 GMT) to reports of a woman with a knife in the town centre.
“A kitchen knife has been recovered by officers and is being forensically examined,” Forber said.
He called on any witnesses to come forward, but urged locals to remain calm.
“We understand that this morning’s incident will have been distressing and shocking for those in the town centre and wider Barnsley communities,” he said.
“Rest assured we are working relentlessly to piece together what happened.”
Several crime scenes have been established and police said they would stay in the area until there was more clarity about what happened.
Earlier the Facebook page of Barnsley Mayday Green Market reported that “this market and most of the town centre is in lockdown”, before later declaring it had received the all-clear.