An anti-Islam group caused panic in Prague on Sunday after staging a fake attack by Islamic State (Isis), according to local media reports.

The group entered the square in the Czech capital's Old Town Square on Sunday in a military vehicle, dressed as Islamic extremists, and carrying a Daesh flag. Tourists fled in panic when members of the group fired fake guns with blank rounds into the air.

Police had given permission for the stunt to take place, but halted it before the group could stage a fake execution of prisoners dressed in the orange boiler suits worn by captives in Isis propaganda videos.

Several people were injured in the stampede, reported Czech news site Zpravy.

The stunt was staged by the anti-Islam Martin Konvička Initiative group. Police have not yet decided whether to launch a criminal investigation into the incident, a police spokesman told the paper.

Miroslav Adamec, a spokesman for the groups said the stunt aimed to illustrate: "what is daily happening several thousand kilometres from here and is now coming even to us, in Central and Western Europe."

The group has staged provocative anti-Islam protests before, with members burning pages of the Quran outside a mosque in Brno in July, Czech news agency CTK reported. Brno Politican Svatopluk Bartík called for a criminal investigation of the group following the incident.

In October, the UN criticised the Czech Republic for its policy of strip searching refugees entering the country, while the country's president, Milos Zeman, has been accused of Islamophobia, describing the integration of Muslims in the West as "practically impossible."