France's counter-terrorism prosecutor, Remy Heitz, said an investigation has been opened for "attempted murderer in relation with a terrorist undertaking" and "criminal terrorist association."
He said no group has claimed responsibility for the explosion yet. Regional authorities said 13 people suffered mostly minor injuries but 11 were still in the hospital on Saturday morning.
French President Emmanuel Macron called the explosion an "attack" during a live interview Friday about the European Parliament elections that run through Sunday.
Heitz described video surveillance that showed the suspect heading toward the center of Lyon on a bike Friday afternoon. The man was seen arriving on foot, pushing his bike along the pedestrian-only Victor Hugo street, then leaving paper bag on a concrete block in the middle of the street near a bakery.
The suspect immediately returned to his bike and left by the same path. One minute later, the explosion shattered the glass of a refrigerator in the bakery, Heitz said.
Investigators at the scene have found screws, metallic balls, batteries, a triggering device that can be used remotely and plastic pieces that may come from the explosive device.
Police issued an appeal for witnesses Saturday with a photo of the suspect from video surveillance. They described the man as "dangerous."
Heitz said police will release more photos soon. The man was wearing a cap and sunglasses that partially hid his face.
Local authorities said security has been enhanced in France's third-largest city, including with more police and military patrols.
The women's World Cup soccer tournament is scheduled to start in France on June 7 and Lyon will host the semifinals and then the July 7 final. After the explosion, Interior Minister Christophe Castaner sent instructions for Lyon authorities to strengthen security for "public sites and sporting, cultural and religious events."
On Victor Hugo street, police removed their cordon around the explosion area and the atmosphere Saturday was almost back to normal with people doing their shopping - except for the chalk lines drawn by forensics on the ground.
"It was scary," said Gisele Sanchez, owner of a cloth shop in front of the bakery. Large wood planks protected her shop window, which was impacted by the blast. Police found screws, metallic balls and batteries in her shop yet Sanchez was able to reopen on Saturday morning.
France is jittery over a spate of attacks in recent years, some of them deadly, carried out by people ranging from extremist attackers to mentally unstable individuals. Five people were killed Dec. 11 in an attack on the Christmas Market in Strasbourg, in eastern France. The alleged killer, Cherif Chekatt - killed by police - had pledged allegiance to the Islamic State group.
Corbet reported from Paris.
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