France was plunged into profound horror and shock for the second time in 12 days when two men slit the throat of a priest as he was celebrating mass in a Normandy church on Tuesday morning.

A nun who witnessed the murder described how the men forced Father Jacques Hamel to his knees before killing him and filmed themselves preaching in Arabic by the altar. They also tried to cut the throat of a parishioner, leaving him for dead.

The gruesome attack took place less than two weeks after a Tunisian man drove at high speed into a Bastille day crowd in the Riviera city of Nice, killing 84 people and injuring hundreds more.

Tuesday’s attack was described by the French president, François Hollande, as an act of terrorism carried out by two followers of Islamic State. The two men were shot dead by police as they came out of the church.

Sister Danielle was in the church at Saint-Étienne-du-Rouvray, near Rouen, at 9.43am local time during morning mass, when the men entered and took five hostages: the priest, two nuns and two parishioners.

She fled as they killed Hamel, 85. “Everyone was shouting ‘stop, stop you don’t know what you’re doing’. They forced him to his knees; he wanted to defend himself and that’s when the drama began,” she said.

Sister Danielle said she had run out of the church while the men cut the priest’s throat. Investigators said the assailants also tried to slit the throat of the other victim, who was described as being seriously injured and between life and death.

She told BFMTV, a TV news channel, that the two men filmed their attack. “They didn’t see me leave. They were busy occupied with their knives … and they were filming it. They filmed themselves preaching in Arabic in front of the altar. It was a horror. Jacques was an extraordinary priest. He was a great man, Father Jacques.”

French police and rapid intervention forces were quickly at the scene. One person has been detained in the investigation into the attack, the Paris prosecutor’s office said.

On Tuesday evening, Paris prosecutor, François Molins, said one of the attackers had been identified as Adel Kermiche, 19, who had tried several times to travel to Syria using the passports of family members. Relatives had reported his disappearance to the authorities.

Kermiche disappeared the first time in March 2015, but was picked up by the German authorities and accused of trying to get to Syria using his brother’s passport. He was returned to France, but was given conditional parole awaiting trial. He disappeared two months later trying to enter Syria from Turkey using his cousin’s identity papers. Sent back again to France he was put under official investigation in May 2015, but released on 18 March 2016 on certain conditions including being fitted with an electronic tag allowing authorities to monitor his movements, to live at his parents’ home and to only go out between 8.30am and 12.30pm.

Molins said the two men had cried Allahu Akhbar (God is Great) as they left the church with three of the hostages. One man had a fake suicide belt made of aluminium and three knives, the other was carrying a backpack made to look like a bomb and a kitchen timer.

Molins said police had tried to negotiate with the two men through a “small window opening on to the sacristie”. The prosecutor adde that police had tried to enter the church and end the siege, but the two men had placed three of their hostages as a human shield.

Hollande, speaking after he arrived in Saint-Étienne-du-Rouvray, described the incident as “a vile terrorist attack” by two supporters of Isis. The group, which claimed responsibility via its affiliated Amaq news agency, “has declared war on us,” Hollande said, adding that it was a war France would have to fight by remaining united.

On Tuesday afternoon, police carried out raids on a house near the church where one of the attackers was reported to live with his parents.

Pierre Henry Brandet, an interior ministry spokesman, said the church was rapidly surrounded by France’s anti-gang police (Brigade de Recherche et d’Intervention, or BRI) who shot the attackers as they came out.

Hollande met members of the brigade, who wore black balaclavas to mask their identities, and praised them for the speed of their intervention, which he said “prevented a much higher toll and saved the lives of hostages … I have met with the family of the priest and I have spoken to the people kept hostage who expressed their pain and sadness as well as a wish to comprehend what has happened.”

The prime minister, Manuel Valls, said the “barbaric” attack was a blow to the Catholic community and the whole of France.

The murdered priest had worked in the parish for more than 10 years. He should have retired at 75 but wanted to continue serving the church and community, local residents said. Federico Lombardi, spokesman for the Vatican, said Pope Francis “shares the pain and horror of this absurd violence” adding that the attack created “immense pain and worry”.

Francis issued “the most severe condemnation of all forms of hatred” and said he was appalled “because this horrific violence took place in a church, a sacred place” and involved the “barbaric” killing of a priest.

A woman who worshipped at the church described Hamel as “a man who fulfilled his role to the end. He was elderly but was always available for whoever. He was a good priest … He has been here for a long time and many parishioners knew him well. He lived in the rectory at Saint-Étienne-du-Rouvray.”

Father Philippe Maheut, vicar general of the Rouen diocese, said everyone was shocked that the priest had been killed while celebrating mass. “We ask ourselves how we have arrived at this point,” he told BFMTV.

“My message would be that we have to continue to meet, to know each other, understand each other, support each other. Perhaps the death of this poor man will produce an electroshock, will be such a strong symbol that people will say we have to do something, but we have said that before.

Hervé Morin, president of the region, said: “This man was a good man, he always had a kind word for everyone. He served at this church for 30 years. Everyone is shocked. This was not just the killing of a man, it was the cutting of the throat of a priest … an act sufficiently thought out to further destabilise French society … and that’s the risk. French society is in danger.”

France remains on high alert nearly two weeks after a man ploughed a truck into a crowd of people celebrating Bastille Day in Nice.

The incident was the [fourth] major attack on France in 18 months and was claimed by Isis. Two attacks in Germany claimed by Isis since then have heightened the tension in Europe.

Hollande told reporters near the scene of Tuesday’s killings: “The people of France should know that they are under threat but they are not the only country, there is Germany and others, and that their strength lies in their solidarity.”

Analysts said while the threat was everywhere, the attack marked a new stage in Isis action, demonstrating that even in a small town of 27,000 inhabitants, “even in church” the French were not safe.

After the attack in Nice, France extended a state of emergency for a further six months. The measure gives police extra powers to carry out searches and place suspects under house arrest. It was the fourth time the security measures have been extended since Isis followers staged a mass attack in Paris in November, killing 130 people in the Bataclan concert hall, the national stadium and city centre bars and restaurants.

Kim Willsher in Paris