A New Zealander has described the terrifying moments he was caught in his car just a block from where the massacre in Barcelona took place.

Peter Marriott was driving on a road parallel to Las Ramblas when "all hell broke loose".

He said people poured out of the popular tourist precinct and described it as sheer chaos.

"It's just gone crazy over here. It's absolute chaos. I didn't expect this here."

Police said 13 people were killed and more than 50 wounded in the terror attack, in which a white van sped down a pedestrian zone and swerved from side to side as it ploughed into tourists and residents.

Marriott was about 700m away from the attack. While he didn't witness it, he said it was too close for comfort.

Police quickly swarmed into the area with the air above his home was reverberating as helicopters hovered overhead hunting for those responsible.

He said the ordeal had left him shaken to the core.

"It's pretty rough, to be honest."

Marriott said he was now concerned for friends who had gone into the area at the time of the attack but who could not reach.

One man has been arrested and is being treated "as a terrorist", police have confirmed.

The BBC says that Spanish media are reporting a suspect involved in the Barcelona attack has been killed in a shootout with police on the outskirts of the city.

State-owned broadcaster RTVE reported that investigators think two vans were used - one for the attack and a second as a getaway vehicle.

Las Ramblas, a street of stalls and shops that cuts through the center of Barcelona, is one of the city's top tourist destinations.