Sources confirmed that the death toll from the latest terror attack to strike a major European city was expected to reach 13.
Government officials confirmed one fatality and said at least 32 people had been injured, seven of them seriously.
Police have arrested a man after a white Fiat van tore through the Las Ramblas district which was packed with shoppers and holidaymakers.
The vehicle careered into terrified pedestrians in the busy tree-lined promenade, one of the most popular parts of the city.
Local media said police were hunting a man named Driss Oukabir who is suspected of having rented the van used in the attack. The passport of a Spanish citizen, of Moroccan origin, was found at the scene.
The identity of the arrested man is not clear.
There were also reports that detectives believe two vans were used, one for the attack and a second as a getaway vehicle.
Lawyer and University of Glasgow rector Aamer Anwar was walking in Las Ramblas when he heard screaming.
He said a shopkeeper told him five or six people were badly injured and described the scene as "chaos".
Mr Anwar old the Press Association: "I had been to the Cathedral and was walking down Las Ramblas for something to eat.
"Part of it was in the shade so I decided to keep walking down and literally within 10 seconds there was a crashing noise.
"I turned around and people were screaming. I could see a woman screaming with her kids. People started running and jumping into shops.
"I ran for about 50 or 100 metres and stopped to see what was happening.
"The police were very quickly on the scene and getting people to move back.
"I could see chaos right at the top area and I spoke to a shopkeeper who had run down and was screaming.
"He was Bengali so I spoke to him in Urdu and he said a van had driven into a crowd and he thought there were five to six people very seriously injured."
Steve Garrett was in a nearby market and sheltered in a bakery with several others after streams of people ran inside.
One member of the group who took refuge with him said she had heard gunshots after the incident.
Mr Garrett told the BBC: "A very large number of people ran into the market area in a big kind of way, lots of screaming, lots of shouting.
"The security guards immediately responded. We ran into the bakery with four or five other people and ran straight upstairs and hunkered down whilst an enormous wave of people went through the market.
"The lady that was with us said she heard some gunshots."
Mr Garrett said a "second wave" of people then entered the market, followed by armed police.
He said: "They seemed to sweep through the market area.
"They seemed to be looking for someone. They were going very carefully, very cautiously, stall to stall."