An attacker ploughed a car into a crowd outside a packed synagogue in Britain on Thursday, a Jewish holiday, before going on a stabbing spree, killing two people and leaving three wounded, police said.

Police said they shot dead the suspect, later identifying him as a UK citizen of Syrian origin, and arrested three other people within hours of the attack in the city of Manchester, which took place as Jewish communities around the world marked Yom Kippur, the holiest holiday in the Jewish calendar.

The two dead victims were Jewish men, police in the northwest English city confirmed, as counter-terror police declared it a "terrorist incident". Three other people were in hospital with serious injuries, police said, after saying four had been wounded.

The three people arrested were "two men in their 30s and a woman in her 60s", who were in custody "on suspicion of commission, preparation and instigation of acts of terrorism", said Greater Manchester Police (GMP).

The attacker wore a "vest which had the appearance of an explosive device", but police revealed Thursday evening it was not functional.

As night fell on Thursday, Orthodox Jewish worshippers emerged from packed synagogues in Manchester after a day of prayers and fasting to learn about the attack, having switched off phones and computers for the day.

Prime Minister Keir Starmer, who left a European summit in Denmark early to chair an emergency response meeting in London, announced security was being boosted at UK synagogues.

Addressing Jewish communities directly in a televised statement shortly after the meeting, he vowed to "do everything in my power to guarantee you the security that you deserve".

He said while antisemitism was not new, "we must be clear it is a hatred that is rising once again, and Britain must defeat it once again".

It was one of the worst antisemitic attacks in Europe since the October 7, 2023 assault on Israel led by Palestinian Islamist group Hamas, which sparked the Gaza war.

Israeli Prime Minister Benjamin Netanyahu condemned the "barbaric attack".

"Israel grieves with the Jewish community in the UK," he said.

GMP said it was alerted shortly after 9.30 am local time that a car had driven into people outside the Heaton Park Hebrew Congregation Synagogue and a security guard had been attacked with a knife.

Chief constable Stephen Watson confirmed later that "two members of our Jewish community have sadly died", adding officers had shot dead the attacker within seven minutes of the first emergency call.

"The driver of the car was seen then to attack people with a knife" while wearing the fake explosives vest, Watson said.

Police praised the swift action of people who reported the attack, saying it had stopped the suspect from entering the synagogue.

A witness told BBC Radio he saw police shooting a man after a car crash.

"They give him a couple of warnings, he didn't listen until they opened fire," the witness said.

King Charles III said he and Queen Camilla were "deeply shocked and saddened".

United Nations Secretary-General Antonio Guterres was among the world leaders to condemn the attack.

"Houses of worship are sacred places where people can go to find peace," Guterres said.

"Targeting a synagogue on Yom Kippur is particularly heinous." (AFP)