The US State Department is warning of a “heightened risk” of terror attacks throughout Europe over the Christmas period.

The travel alert for US citizens said "credible information indicates” that terror groups including the so-called Islamic State and al-Qaeda are continuing to plan attacks in Europe - “with a focus on the upcoming holiday season.”

The state department is warning American citizens to, “exercise caution at holiday festivals, events, and outdoor markets.”

The advisory comes a day after French authorities said they had foiled a potential attack and arrested seven suspects.

Officials did not reveal the potential targets, but the arrests have increased tension in Strasbourg - where a famed Christmas market opens in a few days.

The market, which attracts tourists from across the world, was the target of a failed extremist plot in 2000 by Algerian and French militants who had trained in Afghanistan.

In its advisory, the State Department said extremists have carried out attacks in Belgium, France, Germany and Turkey during the past year and confirmed it was still concerned about the potential for more attacks throughout Europe. 

It said "extremist sympathisers or self-radicalised extremists" might try to carry out attacks.

Terrorists may employ a wide variety of tactics, using both conventional and non-conventional weapons and targeting both official and private interests," it said.

"US citizens should exercise vigilance when attending large holiday events, visiting tourist sites, using public transportation, and frequenting places of worship, restaurants, hotels, etc."

The alert will remain in place until February next year.