A nine-year-old girl was reportedly playing outside with her sister when she was stabbed to death.
Lilia Valutyte and her five-year-old sibling were having fun with a hula hoop when she was attacked.
The pair were playing outside a cafe in Boston, Lincolnshire, where their mum worked.
She was knifed at around 6.20pm on Thursday night, sparking a huge manhunt for her attacker.
Police have arrested two people after raiding a house in Boston.
A resident from the area told the Telegraph: “The little girl was playing in the street with her younger sister when it happened. They had some toys out.
“I’m sure her mum wouldn’t have been far away as she always checked on them. She was a very quiet girl, and I just can’t understand it.
“I didn’t see what happened, but we were told they (police) were looking for footage of a man running away.”
Another resident described the incident as a “parent’s worst nightmare”.
Lilia’s mum has been named as a Lithuanian recruitment agency boss called Lina in The Sun.
Lina was reportedly watching her girls play through the window of the cafe while she worked.
She was the first on the scene after the stabbing, rushing to her daughter’s side.
A local told The Sun: “Her mum had a business inside. She worked from a desk on her laptop and had been doing it for a couple of months.
“It’s only a quiet street so she would let them play outside.
“I think they had a hula-hoop and dolly’s pushchair. I’m sure she would have been inside.”
A doll’s pushchair was left lying in the road next to paramedic equipment following the stabbing.
One of Lina’s friends described the attack as “inhuman”.
Taxi driver Jonathan Newton, 55, said: “We are a close knit community here and the town is rocked to the core by this tragedy.
“She was just a little girl, how could anyone do this to a nine-year-old? It’s the most shocking tragedy to ever befall our little town.
“I’m just speechless.”
East Area Commander Chief Superintendent Kate Anderson said: “Our thoughts continue to be with Lilia’s family and friends.
“If any members of the public have information that might assist, please call 101 quoting incident 419 of 28th July, or they can report anonymously via Crimestoppers.”
A spokesperson for Lincolnshire Police added: “We can now confirm the identity of the nine-year-old girl who sadly died in Boston yesterday as Lilia Valutyte.
“She died on Fountain Lane, as a result of what we believe to be a stab wound.”
The force confirmed two people have so far been arrested, although they did not release further details.