Video on social media, apparently taken minutes after the crash, showed dozens of people in Muslim dress, including children, screaming and rushing forward to see what happened.
A statement from the nearby Newcastle Central Mosque said the collision took place just as people were leaving Eid prayers.
Newcastle lawmaker Chi Onwurah, who said on Twitter that she was one of thousands celebrating Eid in the city, tweeted: "I was at the prayers earlier and there was so much joy and unity. Thinking of those affected by what I am told was terrible accident."
Britain is on high alert for terror-related incidents involving vehicles after a string of recent attacks.
A man drove a van into Muslim worshippers leaving two London mosques on June 19, killing one and injuring others. Police said that was a terror attack directed at Muslims.
Police in Newcastle have put extra officers on patrol to reassure people.
- AAP