Pope Francis was informed about the hostage situation at the church in Saint-Etienne-du-Rouvray near Rouen and the murder of 84-year-old Father Jacques Hamel, said Jesuit Father Federico Lombardi, Vatican spokesman.
"With pain and horror" for the "absurd violence," Pope Francis expressed his condemnation of "every form of hatred" and offered his prayers for all those involved.
"We are particularly stricken because this horrible violence occurred in a church – a sacred place in which the love of God is proclaimed – with the barbaric killing of a priest," Father Lombardi said.
Police said two men, armed with knives, entered the church during Mass. They reportedly slit the throat of Father Hamel. They said another person present at the Mass was in serious condition at the hospital.
A nun who witnessed the attack described the scene to French radio station RMC.
"In the church, everyone screamed 'Stop, you don't know what you're doing.' They didn't stop. They forced him to his knees; he tried to defend himself, and it was then that the drama began," said the nun, who identified herself as Sister Danielle.
"They recorded themselves (on video). They did a little – like a sermon – around the altar in Arabic. It was a horror."
The sister managed to escape the church and flag down a car for help, RMC reported.
She told the station about her respect for her colleague.
"It's necessary to remember that this was an extraordinary priest," Sister Danielle told RMC. "That's all I want to say. He's great, Father Jacques."
The Islamic State group claimed responsibility for the attack via its news site, though the group's involvement has not been confirmed by French police. French President Francois Hollande suggested the group was behind the attack.
Hollande called Pope Francis to express "the grief of the French people after the odious assassination of Father Jacques Hamel by two terrorists," said a statement from the president's office.
Archbishop Dominique Lebrun of Rouen, who was in Krakow, Poland, with World Youth Day pilgrims when the attacked occurred, said he would return to his archdiocese.
"The Catholic Church can take up no weapons other than those of prayer and brotherhood among people of good will," the archbishop said in a statement from Krakow. He said that while he would leave Poland, hundreds of young people from his diocese would remain. "I ask them not to give in to violence," but instead "become apostles of the civilization of love."
Msgr. Olivier Ribadeau Dumas, secretary-general of the French bishops' conference, also was in Krakow for World Youth Day. He told media: "We know now they were both terrorists."
"We believe that evil and violence will not have the upper hand, and all the French bishops share this opinion," he said.
Cardinal Pietro Parolin, Vatican secretary of state, sent a message of condolence to Archbishop Lebrun. The cardinal said Pope Francis was "particularly upset that this act of violence took place in a church during Mass, the liturgical act that implores God's peace for the world."
In the latest event of violence, the cardinal said, the pope prayed God would "inspire in all thoughts of reconciliation and brotherhood."