Police say a lone male attacker carrying an improvised explosive device was responsible for the bombing at Manchester Arena.
The number of people killed by the explosion at the end of a sold-out Ariana Grande concert has increased to 22 – and 59 people were injured.
Greater Manchester Police chief constable Ian Hopkins has confirmed that children are among those who died.
Videos from inside the venue show fans running and screaming, while footage from outside captures emergency vehicles rushing to the scene.
Armed police filled the streets outside the arena, and bomb disposal units, firefighters and paramedics also attended the scene.
Fifty-nine people have been taken for treatment at six hospitals around the city.
Sky News Home Affairs correspondent Mark White said hospitals in the area were treating “a number of people with what are believed to be shrapnel-type injuries”.
Police have warned people to stay away from the venue.
Greater Manchester police’s Chief Constable Ian Hopkins said the force was working closely with the counter-terror officers and UK intelligence partners.
He said more details would be provided “when we have a clearer picture”.
Manchester’s Victoria station, which backs onto the arena, has been evacuated and all trains cancelled.
Ariana Grande, who was unharmed, tweeted to say she is “broken”.
“From the bottom of my heart, I am so, so sorry,” she said. “I don’t have words.”
from the bottom of my heart, i am so so sorry. i don’t have words.
— Ariana Grande (@ArianaGrande) May 23, 2017
Her manager Scooter Braun said they mourned “the lives of children and loved ones taken by this cowardly act”.
Manchester Arena said the incident had happened outside the venue “in a public space”. Others said it happened close to the ticket offices in a foyer area.
Bomb disposal experts carried out a controlled explosion at nearby Cathedral Gardens shortly after 1.30am, but have since confirmed the item they found was abandoned clothing and not suspicious.
Concert-goers affected by the suspected terror attack have been offered shelter by residents, taxi drivers are said to be offering free rides and there are reports that a hotel near the venue has taken in dozens of children.
Manchester Mayor Andy Burnham tweeted: “My heart goes out to families who have lost loved ones, my admiration to our brave emergency services. A terrible night for our great city.”
Theresa May said her thoughts were with the victims and families of those affected and has condemned “what is being treated by the police as an appalling terrorist attack”.
Election campaigning by the Conservatives, Labour and UKIP has been suspended, with other parties expected to do the same.
Latest statement on incident at Manchester Arena pic.twitter.com/BEpLOan3dY
— G M Police (@gmpolice) May 23, 2017
Home Secretary Amber Rudd also condemned the “barbaric attack, deliberately targeting some of the most vulnerable in our society”.
She said: “The full details of exactly what happened are still emerging, but I am proud of the police and first responders who reacted to this tragic incident so swiftly.”
An emergency COBRA meeting is expected to take place in Downing Street at 9am.
Labour leader Jeremy Corbyn said: “I am horrified by the horrendous events in Manchester last night.
“My thoughts are with families and friends of those who have died and been injured. Today the whole country will grieve for the people who have lost their lives.”
Manchester Fire and Rescue tweeted a statement to say crews were helping police and paramedics at “the scene of this horrific incident”.
“Our thoughts and prayers go out to everyone affected and especially the families who lost their loved ones tonight – utterly heartbreaking,” they said.
Our thoughts and prayers go out to everyone affected and especially the families who lost their loved ones tonight – utterly heartbreaking
— Manchester Fire (@manchesterfire) May 23, 2017
North West Ambulance Service Trust has urged people to only call in the case of life-threatening emergencies.
“If you require our assistance over the next few hours, please bear with us we have a large number of resources at the incident in Manchester,” the trust tweeted.
NWAS has taken 59 casualties from the Manchester Arena incident to various hospitals & treated a number of walking wounded on scene
— NWAS NHS Trust (@NWAmbulance) May 23, 2017
In total 60 NWAS ambulances attended the incident in Manchester yesterday evening
— NWAS NHS Trust (@NWAmbulance) May 23, 2017
Two US officials speaking to the Reuters news agency suggested that initial signs pointed to a suicide bombing.
If it is confirmed to be a terrorist attack, the explosion will become the worst atrocity in the UK since the deaths of the 52 victims of the 7/7 London bombings in 2005.
It comes two months after the Westminster atrocity, in which terrorist Khalid Masood killed five people before he was shot dead by police.
In London, the Met police urged people to stay “vigilant” and added: “You’ll see more police in London today.”
:: People concerned about loved ones can call 0161 856 9400. To report any concerns about terrorism, call the anti-terrorist hotline on 0800 789 321.