Six people, including three children, were injured when a car mounted a kerb and ploughed into a crowd of people outside a sports centre in Newcastle.
It happened outside Westgate Sports Centre where an event was taking place to celebrate the end of Ramadan.
Two children are in intensive care and one adult is seriously injured.
Northumbria Police said the incident was not believed to be terrorism-related. A 42-year-old woman was arrested and is in custody.
The remaining injured are believed to have serious but non-life threatening injuries, officers said.
The woman who was arrested had been celebrating Eid with her family and hundreds of others.
No-one else was being sought. Extra patrols were in the area to reassure communities, police said.
One eyewitness said: "From what I understand, [a woman who had been at prayer] was about to leave in her car and I believe she lost control.
"I ran up straight away because everyone was moving in on all the injured, trying to put water in their mouths.
"The parents of the kids were there. I had to sort of try and calm them down just to tell them the ambulance is there and they will take care of it; they know what they're doing."
'Prayers for recovery'
Emergency services included six ambulances, two paramedic rapid response vehicles and the air ambulance.
In a statement, the nearby Newcastle Central Mosque said: "We pray and hope that all those affected recover soon fully.
"We thank the emergency medical services, the police and over 100 volunteers from the mosque for their quick response to the incident.
"We urge everyone to please pray for all those affected."
Chi Onwurah, Labour MP for Newcastle Central, tweeted: "So sad, I was at the prayers earlier & there were so much joy & unity. Thinking of those affected by what I am told was terrible accident."