Norway paid tribute on Sunday to the victims of a deadly shooting near a gay bar in the capital that shocked the normally peaceful country and led to the cancellation of a Pride march.

The altar of Oslo cathedral had vases with rainbow flags for a service to remember the victims of the attack, attended by Crown Princess Mette-Marit.

Investigators are probing the motives of the suspected gunman, who opened fire in the early hours of Saturday, killing two and wounding 21.

"Bullets cannot kill love," the head of the Norwegian Protestant Church, Olav Fykse Tveit, said.

Map of Norway locating Oslo
Map of Norway locating Oslo AFP / Valentin RAKOVSKY

Noting that the Church had for years opposed equal rights for same-sex couples, he said: "We see that we can learn, sometimes in spite of ourselves, that diversity is a present, a richness, and that many homosexuals have a capacity for love that we are incapable of."

"The shooting... put an end to the Pride march," said a somber Prime Minister Jonas Gahr Store. "But it has not put an end to the fight to end discrimination, prejudice and hate."

The shooting occurred at around 1:00 am on Saturday (2300 GMT on Friday) near the London Pub gay club in Oslo's packed nightlife district, where Pride parties were in full swing.

Crown Princess Mette-Marit attended the mourning service in Oslo Cathedral
Crown Princess Mette-Marit attended the mourning service in Oslo Cathedral NTB via AFP / Javad Parsa

Two men in their 50s and 60s died. Twenty-one other people were wounded.

Police quickly arrested the suspect, whom they described as a 42-year-old Norwegian man of Iranian descent known to the nation's security services. Norwegian media named him as Zaniar Matapour.

Domestic intelligence service PST said it was treating the attack as "an act of Islamist terrorism".

The suspect "has a long history of violence and threats", PST chief Roger Berg said.

He said the man had been on the PST's radar "since 2015 in connection with concerns about his radicalisation" and membership of "an Islamist extremist network" and had "difficulties with his mental health."

'Bullets cannot kill love,' the head of the Church said
'Bullets cannot kill love,' the head of the Church said NTB via AFP / Martin Solhaug Standal

Police ordered the man to be placed under "judicial observation" to determine his mental state. He refused on Saturday to be questioned as to his motives.

When asked about the motives for the shooting, Borge Enoksen, a senior police official, told a press conference on Sunday that "It can be a combination of things. It's too early to make a conclusion."

On Saturday, the intelligence services raised the country's threat level from moderate to "extraordinary".

People, many in tears, laid flowers and rainbow flags at the police security cordon around the scene of the shooting.

"Love is love -- and it's the same thing for everyone. Everyone has the right to live as they choose," said chef Kristin Wenstad as she paid her respects.

The organisers of the LGBT Pride march, due to take place on Saturday afternoon, called it off on the advice of the police.

Thousands nonetheless marched spontaneously through Oslo on Saturday in a display of unity also seen at Pride marches across Europe.

"We're here. We're queer. We won't disappear," they chanted.

Footballer Ada Hegerberg waved a rainbow armband after scoring the first goal in the women's national team match against New Zealand on Saturday evening.

"We all have the right to love and be loved," tweeted NATO Secretary General Jens Stoltenberg, who is Norwegian.

Saturday's shooting came 11 years after right-wing extremist Anders Behring Breivik killed 77 people in the country's worst peacetime massacre that shook the nation to its core.