Portugal has declared a day of national mourning after at least 17 people were killed and 21 others injured when one of Lisbon’s famous funicular cars derailed and crashed into a building on Wednesday evening.

Those killed on the Glória funicular were all adults, according to Margarida Castro Martins, the head of the city’s civil protection agency.

She said the victims’ families would be informed before any names or nationalities were released, but confirmed that those injured in the crash included Portuguese people as well as two Germans, two Spaniards and one person each from Canada, Cape Verde, France, Italy, Morocco, South Korea and Switzerland.

The injured people, three of whom were seriously hurt, were being treated in several hospitals in the Lisbon region. Two of the most badly injured victims died in hospital overnight, raising the initial death toll from 15 to 17.

Teams of pathologists from the National Forensics Institute worked through the night on autopsies, officials said.

Public prosecutors have launched an investigation into the cause of the crash, which happened just after 6pm on Wednesday as the evening rush hour began.

The Portuguese authorities also suspended Lisbon’s three other funiculars for safety checks after the derailment.

Known as the Elevador da Glória, the well-known vehicle goes up and down a steep hill in central Lisbon in tandem with one going the opposite way.

Footage showed the wreckage of the yellow-and-white car lying on its side in the narrow street it traverses. Its sides and top were crumpled, and it appeared to have crashed into a building where the road bends. Parts of the vehicle, made mostly of metal, were crushed.

Witnesses told local media that the streetcar careened down the hill, apparently out of control. “It hit the building with brutal force and fell apart like a cardboard box,” Teresa d’Avó told the TV channel SIC.

Another witness, Bruno Pereira, told CNN Portugal that the car at the bottom of the hill had suddenly jerked off the track and on to the pavement, just before the other one came hurtling down, “and struck the walls like a rock”.

“A few seconds later, the other tram – which counterbalances this one – arrived, completely out of control, crashing into the walls, people screaming. It hit the last time at the curve between Calçada da Glória and Rua da Glória and stopped with a loud crash,” he said.

“There was panic. We all ran, everyone there. Some people tried to pull people out from under the tram … There were cobblestones everywhere, and the metal grooves, on which the car ran, were all popped out.”

Lisbon’s mayor, Carlos Moedas, who visited the scene shortly after news of the crash emerged, said the city was in mourning. “This is a tragedy that has never happened before in our city,” he told reporters. “Now is the time for action and help. I thank everyone for their response in just a few minutes. The only thing I can say is that it’s a very tragic day.”

The government declared that Thursday would be a day of national mourning. A statement from the office of the prime minister, Luís Montenegro, said the tragedy had “brought grief to … families and dismay to the country”.

The president, Marcelo Rebelo de Sousa, lamented the crash and expressed hope that authorities would soon establish its cause.

The Glória line, which carries about 3 million people annually, is one of three funicular lines operated by the municipal public transport company Carris, and is used by tourists as well as residents.

Its two cars, each capable of carrying about 40 people, are attached to opposite ends of a haulage cable with traction provided by electric motors on the cars.

Carris said “all maintenance protocols have been carried out”, including monthly and weekly maintenance programmes and daily inspections.

Lisbon’s city council suspended operations of other streetcars and ordered immediate inspections, local media reported.

The crash brought condolences from European political leaders. Pedro Sánchez, the prime minister of neighbouring Spain, said he was saddened by the “terrible accident”, adding: “We send all our love and solidarity to the families of the victims and to the Portuguese people at this difficult time. We also hope that those who have been injured will get better quickly.”

Italy’s foreign minister, Antonio Tajani, said he had met his Portuguese counterpart and expressed his “solidarity with the victims”.

The European Commission president, Ursula von der Leyen, expressed her sadness and offered her condolences to the families of the victims.

A spokesperson for the UK’s Foreign, Commonwealth and Development Office said it was in touch with the local authorities and stood by “to provide consular assistance if there are any affected British nationals”.