BERLIN (REUTERS) - German police think that the man from Pakistan who was arrested as a suspect in the attack on a Berlin Christmas market that killed 12 people on Monday (Dec 19) was not the actual perpetrator, Die Welt newspaper reported, citing senior security sources.

"We have the wrong man," said a senior police chief. "And therefore a new situation. The true perpetrator is still armed, at large and can cause fresh damage," the paper quoted the source as saying.

The truck crashed into people who had gathered on Monday evening around wooden huts serving mulled wine and sausages at the foot of the Kaiser Wilhelm memorial church in the heart of former West Berlin.

German Interior Minister Thomas de Maiziere earlier said there was no longer any doubt that the incident was a terror attack, adding that the suspect was an asylum-seeker.

"We no longer have any doubt that this terrible event yesterday evening was an attack," de Maiziere told a news conference in Berlin. He added that nobody from the ISIS militant group had claimed responsibility for the attack so far.

His comments followed remarks from Chancellor Angela Merkel earlier that German authorities were working on the assumption that the incident was a terror attack.

He said the suspect is Pakistani and had arrived in Germany on Dec 31, 2015, seeking asylum. "He denies the act," de Maiziere told journalists, adding that the suspect's request was still pending.

Christmas markets in Berlin were shut for a day out of respect for victims and their relatives, but de Maiziere said the markets or major events elsewhere must continue. "Cancelling them would be wrong," he said.

A German security source earlier said the suspect was a 23-year-old migrant from Pakistan known to police for committing minor offences. The source said the man had been staying at a refugee accommodation centre in the now defunct Tempelhof airport.

The incident evoked memories of an attack in Nice, France in July when a Tunisian-born man drove a 19-tonne truck along the beach front, mowing down people who had gathered to watch the fireworks on Bastille Day, killing 86 people. That was claimed by the Islamic State in Iraq and Syria (ISIS) militant group.

Berlin police are investigating leads that the truck had been stolen from a construction site in Poland. They said a Polish man was found dead inside the vehicle but added he was not in control of it.

German magazine Focus cited Karl-Heinz Schroeter, interior minister of the state of Brandenburg, as saying one of people found dead at the scene was shot, and that was probably the Pole.

Bild newspaper had earlier cited security sources as saying the suspect was named Naved B. and had arrived in Germany a year ago. In legal cases German officials routinely withhold the full name of suspects, using only an initial.

Local broadcaster rbb cited security sources as saying the suspect in custody came to Germany via Passau, a city on the Austrian border, on Dec 31, 2015.

Die Welt said the suspect in custody has had a temporary residence permit since June 2016, citing a criminal police report. The report also said that there continued to be a high threat from Islamic terrorism in Germany but there was no concrete threat.

Flags will be hung at half-mast around Germany on Tuesday and Berlin Christmas markets were closed for the day out of respect.

Dresden tourist information service said authorities had erected concrete blocks around the Striezelmarkt, one of Germany's oldest Christmas Markets, to increase security.

Christmas markets selling ornate, often hand-crafted decorations, seasonal foods and hot wine are a beloved tradition in Germany.