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Police said the bomber detonated his vest as they entered the bar and detonated his suicide belt as the police arrived.
At least one of the victims was wearing a suicide belt.
Berlin police chief Dieter Strache told a news conference that the man, who was known to the police, had been identified by the Berliner Morgenpost newspaper.
“I am afraid for the life of me that he was radicalized,” Strache said.
“But I can only guess.
I cannot say for sure.”
The police chief said the Berlin bomber was armed with a knife.
Police believe that the bomber was radicalizing and wanted to join Islamic State, or ISIS, which is battling for a foothold in Europe and the Middle East.
Berlin’s top security official said that the bombing had been planned for a few months and had been in the works for some time.
The Berliner Welt newspaper reported that a local man had been arrested, but he was not immediately identified.
Berlin has a high rate of foreign-born immigrants, especially in the capital.
The Islamic State has carried out deadly attacks in Europe, especially France.
In the last month, more than 40 people have been reported killed in Europe by Islamic State militants, including a French man killed by a man who stabbed him to death.
The number of German Muslims killed in attacks by Islamic extremists rose from 576 in the first quarter of this year to 598 in September.
Berlin was one of five European cities hit by a wave of anti-Islam and anti-immigrant violence over the past two months.
Authorities said Saturday that a man had attacked a police station with a car full of explosives in the eastern German city of Neustadt.
Police found three homemade explosive devices, two Kalashnikov assault rifles and a knife in the car.
Police spokeswoman Kathrin Hauser said it appeared the attacker acted alone, but said the motive was not yet clear.
Berliner Zeitung reported that two people were shot dead and two others wounded in a shooting outside a restaurant in the city’s central district.
The police officer who shot the attacker had been a police officer for three years, the paper reported.
The suspect who was killed in Neustads shooting, who had been on the force for four years, was a member of a criminal intelligence unit, the police chief told reporters.
Berliners reacted with anger after the shootings.
Berlin, one of Europe’s biggest and most cosmopolitan cities, has been on edge over the last several months after the murder of German-born imam Anis Amri, who murdered 12 people and injured 23 others in Berlin in October.
The killer was found dead after police stormed the apartment he shared with his German girlfriend and found the suicide belt that killed him.
Authorities also said Amri had radicalized while on a holiday in Tunisia.
In July, the Islamic State claimed responsibility for the attacks on the city, which were carried out by two men who had ties to radical Islamist groups.
Berlin Mayor Henriette Reker said she was “heartbroken” by the attacks in Neusiedl and Neuststad.
“We have to stand together to prevent this from happening again,” Reker told the German public broadcaster ARD.
“The Berlin police officers must be on guard for every attack,” she said.
Berlin Police Chief Steffen Seibert said the attack was a reminder of the citys “great tradition of openness and tolerance.”
“We cannot afford to have such attacks,” Seiberts office said in a statement.
“There must be a strong law and order system in Berlin.”
Berlin police Chief Strache, who said that all the victims had been wearing their belts when they entered Neustader Strache called for an international investigation into what he called a “sophisticated and deliberate attack.”
The Berlin police officer, who is also a detective, was not injured in the incident, the chief said.
He added that the attacker was a “terrorist.”
He added the attacker “believed in killing as many people as possible.”
Police had been searching for the man in Neuster Strache since Friday night.