TUNIS - Armed with Kalashnikovs, two gunmen targeted tourists on a beach near two popular hotels in the attack yesterday on the Tunisian city of Sousse which killed at least 27 people, including foreign tourists, an Interior Ministry spokesman said.

Sousse, 150km from Tunis, is one of Tunisia's most popular beach resorts, drawing visitors from Europe and neighbouring North African countries. Tourism is also a major source of income for the government.

Holidaymaker Susan Ricketts told Sky News she was on the beach with her sister when she heard gunfire. "Everyone just started running and screaming. The whole place just cleared."

Irishwoman Elizabeth O'Brien, who was staying at a neighbouring hotel with her sons, said there was panic on the beach when gunfire erupted. "I honestly thought it was fireworks and then when I saw people running... I thought, my God, it is shooting," she told Irish radio station RTE. "The waiters and the security on the beach started to say 'Run, run, run!'"

Tunisian Interior Ministry officials said that one of the attackers had been killed in a gunfight with security forces.

Tunisia has been on high alert since March, when Islamist militant gunmen attacked the Bardo museum in Tunis, killing a group of foreign tourists.

At least 3,000 Tunisians are estimated to have left their homes to become one of the largest groups of foreign fighters in territories held by the Islamic State in Iraq and Syria.

The group has repeatedly warned that Tunisia is next in its plan for an expanded, self-declared Islamic caliphate.

BLOOMBERG, REUTERS