Sally Groome, who works for Minster FM in York was in the Tunisian resort and told the station what she witnessed.
She said: “I was lying on a sunbed then all of a sudden lots of people came running very, very fast from the beach and then a member of the hotel staff said for us all to make our way to reception. So everyone went quickly to reception and then we were told to go to our rooms. We overlook the main road, and there’s been so many police vehicles and sirens all heading towards what we think is the direction of the beach.”
At 27 people are thought to have been killed in the attack.
One gunman was killed and another is being pursued in the town of Sousse, a popular holiday destination for Britons.
Photographs have been posted on Instagram showing a man on the beach wearing blue shorts lying face down in the sand with what looks like blood in the area around his head.
Empty sun loungers can be seen behind him and there does not appear to be anyone else near him.
Elizabeth O’Brien, an Irish woman on holiday with her two sons in the resort, described how she grabbed her children and ran for their lives when they heard gunfire erupting from one of the hotels.
“We were on the beach, my sons were in the sea and I just got out of the sea. It was about 12 o’clock and I just looked up about 500 metres from me and I saw a (hot air) balloon collapse down, then rapid firing, then I saw two of the people who were going to go up in the balloon start to run towards me - because I thought it was fireworks,” the Dubliner told RTE Radio.
“So, I thought ‘oh my God, it sounds like gunfire’, so I just ran to the sea to my children and grabbed our things and as I was running towards the hotel, the waiters and the security on the beach started saying ‘run, run run!’ and we just ran to our room, which is like a little bungalow.
“So we are actually trapped in our room.”
Ms O’Brien said the Irish consul in Madrid, Spain, called her to say it was a terrorist attack in the hotel next door and told her to stay where she was.
“My travel agent told me to go to the reception to speak to the rep, but I’m afraid. I’m stuck in the room with my two sons, not knowing what’s going on,” she said.
The Foreign Office said it is aware of the reports and was investigating.
Speaking at the conclusion of the European Council summit in Brussels, Prime Minister David Cameron said he had spoken to French president Francois Hollande to offer his support following the attack in Grenoble and would also speak to the Tunisian government following the attack there to offer “our solidarity in fighting this evil of terrorism”.
He said: “This is a threat that faces all of us. These events have taken place today in Tunisia and in France but they can happen anywhere. We all face this threat.
“There will be a ministerially-chaired Cobra meeting, the Government’s emergency committee, later on this afternoon to make sure we are doing everything we can to co-operate and co-ordinate with other countries and any information that we have we share with them in fighting this threat.”
He added: “We have got to do all we can to help. That means co-operating on counter-terrorism, building our capacity on counter-terrorism, it means dealing with the threat at source whether that is Isil in Syria and Iraq or whether it is other extremist groups around the world.
“Perhaps more important than anything is poisonous radical narrative that is turning so many young minds and we have to combat it with everything we have.”
The Prime Minister said that the West must stop “the poisoning of ... young minds” by Islamic State (IS) and other extremists.
“The people who do these things, they sometimes claim they do it in the name of Islam. They don’t. Islam is a religion of peace. They do it in the name of a twisted and perverted ideology that we have to confront with everything that we have.
“We must stop the poisoning of these young minds in our country, in other European countries, and around the world.”
Tension has been high in Tunisia since an attack on the National Bardo Museum in March which killed 22 people, mostly foreign tourists.
Sousse is a city on the east coast of Tunisia, about 87 miles (140km) south of the capital, Tunis. Around 1.2 million tourists visit Sousse every year, drawn by the hotels, sandy beaches and culture.
Thomas Cook, which has holidaymakers in the resort, said: “Thomas Cook has been advised of an incident that occurred earlier today in Sousse, Tunisia.
“At this time, details are not clear as to which property(ies) have been affected, with conflicting news reports.
“We are currently gathering information and will provide an update as soon as possible. Our teams on the ground are offering every support to our customers and their families in the area.
“We will continue to monitor the situation, working closely with the FCO and local authorities.
British holidaymaker Gary Pine is staying in the El Mouradi Palm Marina hotel close to where the incident happened.
Situated at the back of the hotel, near the pool area, he told Sky News by phone that he could no longer hear any noise and said the hotel was “very, very quiet” at that stage, but said it would have been very busy.
“The beach tends to be full up very quickly so it’s the usual story of getting down to lay your towel at half past six to get a decent beach position, so all of the beach positions were taken,” he said.
Mr Pine said that at the front of his hotel alone there would have been “several hundred” people, and he said he could see every resort along and there would have been “several hundred” more outside the others.
“So it’s quite a busy beach.
“There’s a lot of people walking up and down, taking in this lovely weather, so it’s a very busy beach, but as I said it became apparent very quick that it was something more than firecrackers when you could hear bullets whizzing around,” he said.
It is believed there are scores of Irish holidaymakers in Sousse at the moment.
While Dublin’s Department of Foreign Affairs could not immediately confirm the number of citizens in the resort, it said there were no reports at this stage of any Irish hurt.
“Our embassy in Madrid and our Honorary Consul in Tunis are monitoring the situation in Sousse, Tunisia and are providing updates,” a spokeswoman said.
“We are currently not aware of any Irish citizens involved in the incident.
“Anyone with concerns about family or friends can call the Department on 01 408 2000.”