A car has driven into a group of people in the Munich leaving at least 28 people hurt, two of them seriously, German police have said.

The fire service said some of the injured were in a "life-threatening condition".

The driver was a 24-year-old Afghan asylum seeker, police said. The suspected attacker was arrested at the scene and posed no further risk, they added.

Chancellor Olaf Scholz told reporters: "This attacker cannot count on any mercy. He must be punished and he must leave the country."

Germany is 10 days away from federal elections in which asylum, immigration and security have taken centre-stage in the campaign.

Asylum seekers have been involved in a series of deadly attacks in recent months, and police said there were indications of a "extremist background" in what had happened in Munich.

The drama unfolded during a rally linked to the transport union Verdi at around 10:30 local time (09:30 GMT) on Thursday.

The car was seen approaching police cars at the rally in Dachauer Strasse, a short distance from Munich's main station, before speeding up and driving into a group of people, police said. Police then shot at the vehicle before detaining the man.

Rescue helicopters were quickly at the scene and Munich's mayor Dieter Reiter said children were among those injured.

A police spokesman told Bavaria's public broadcaster BR that officers were checking whether there was a link to the demonstration. The union said it was deeply shocked and sent its thoughts to those who had been injured.

Eyewitnesses said they saw people running for shelter in shops and residential buildings as the "distressing" scene unfolded.

"It is obviously very unsettling," said a student who had been studying in a nearby coffee shop. "I can't concentrate on anything else."

Bavaria's Premier Markus Söder called the incident a "suspected attack".

"Something has to change something in Germany – and quickly," he said.

For Germans there were immediate reminders of an attack on a Christmas market in Magdeburg less than two months ago that killed six people and injured 300 others.

"When you get the news that someone has once again driven a car into a crowd of people, the fact that there are many injured, is a slap in the face," said Söder.

"We will clarify all the details, but we react cautiously to every attack like this."

Police said they could not confirm whether anyone else was involved, following unconfirmed reports of a second person in the car.

The suspect was known to police for theft and drug offences, officials said.