As many as 30 people are feared dead after a gunman opened fire at Norway Labour Party's youth camp on the island of Utoya, fifty miles south of Oslo.
An eyewitness reported seeing between 25 and 30 bodies. Police have confirmed that nine or ten people were killed in the shooting spree, but said that is a preliminary figure.
Norway's Minister of Justice and the Police Knut Storberget said that a Norwegian man was arrested after being shot by police.
An eyewitness told Norwegian broadcaster NRK he saw more than 20 bodies on the shore and in the water. It is understood panicked teenagers had tried to flee the island by swimming as the gunman opened fire with an automatic weapon.
Norwegian police have said that undetonated explosives were also found.
Up to 700 people were believed to be on the island, mostly teenagers aged between 14 to 18.
The gunman appeared “tall, blond and [of] Nordic looks” according to reports.
A reporter from Norwegian TV 2 news channel, Lasse Evensen, said he has spoken to several witnesses at the site.
"They told me that there was a man with light hair and light skin, 190 centimeters tall and well-trained, who pulled out an automatic weapon and opened fire," said Evensen.
Prime Minister Jens Stoltenberg had been due to attend the event.
At at a press conference he said: "I have a message for those who attacked us, this is a message from all of Norway, you are not going to destroy us, you are not going to destroy our democracy..
"Nobody is going to bomb us into silence, nobody is going to shoot us into silence.
"Tomorrow we will show the world that the Norwegian democracy grows in strength when it matters..
"We must never stop standing up for our values. We must show that the Norwegian society can stand up to these testing times. We must show humanity, but not naivety."
The attack followed a bomb blast at the government headquarters in Oslo that has killed at least seven people.
The powerful bomb tore into the heart of Norway, ripping open buildings, including the prime minister's office. Mr Stoltenberg was working at home and was not injured.
The square where the bomb exploded was covered in twisted metal and shattered glass, and carpeted in documents expelled from the surrounding buildings, which house government offices and the headquarters of some of Norway's leading newspapers.
Oslo police said the explosion was caused by "one or more" bombs, but declined to speculate on who was behind the attack. They confirmed they suspect the camp shooting and the Oslo blast are linked.
Mr Stoltenberg told NRK: "Co-workers have lost their lives... it's frightening. That's not how we want things in our country.
"But it's important that we don't let ourselves be scared. Because the purpose of that kind of violence is to create fear."
Prime Minister David Cameron has said he was "outraged" at the attacks.
Mr Cameron said: "My thoughts are with the wounded and those who have lost friends and family, and I know everyone in Britain will feel the same.
"These attacks are a stark reminder of the threat we all face from terrorism.
"I have called Prime Minister Stoltenberg this evening to express my sincere condolences and to let him know that our thoughts are with the Norwegian people at this tragic time.
"I have offered Britain's help, including through our close intelligence cooperation."
Foreign Secretary William Hague said the UK stands "shoulder to shoulder" with Norway following the attack.
"Our embassy stands ready to provide assistance to any British nationals who may have been caught up in the attack."