Police said the incident in Newcastle was not believed to be terrorism-related but a full investigation was underway.
"As previously stated there is nothing to suggest that this is terror related. A 42-year-old woman is currently in police custody and police are not looking for any other suspects at this time," a Northumbria Police statement said.
One of the children is said to have been critically injured. Hundreds of people were at the event this morning to mark the end of Ramzan outside the Westgate Sports Centre.
"We have taken six people to hospital; they have gone to the Royal Victoria Infirmary in Newcastle; three children and three adults."
More From This Section
Emergency services included six ambulances, two paramedic rapid response vehicles and the air ambulance.
An eyewitness told the BBC: "From what I understand, [a woman who had been at prayer] was about to leave in her car and I believe she lost control.
"I ran up straight away because everyone was moving in on all the injured, trying to put water in their mouths.
"It caused a lot of panic; everyone was screaming when it happened, it wasn't the best of experiences."
Chi Onwurah, Labour MP for Newcastle Central, tweeted: "So sad, I was at the prayers earlier & there were so much joy & unity. Thinking of those affected by what I am told was terrible accident."
Britain is on high alert following recent terror attacks involving vehicles. On June 19, a man drove a van into Muslim worshippers in London, killing one and injuring others.