Lippert, 42, was bleeding from wounds to his face and wrist but was able to walk after the attack. Doctors said later on Thursday his condition was stable after "very successful" surgery that required 80 stitches in his face.
The assailant was caught and identified by police as 55-year-old Kim Ki-jong. In 2010, Kim tried to attack the Japanese ambassador to Seoul by throwing a piece of concrete and was given a suspended jail term, according to police.
 Witnesses and police said Kim used a small fruit knife in the attack, which took place inside a large government arts centre across the street from the heavily guarded US Embassy on the South Korean capital's main ceremonial thoroughfare.
"We strongly condemn this act of violence," US State Department spokeswoman Marie Harf said.
US President Barack Obama called Lippert to wish him a speedy recovery, a White House official said.
The assailant was dressed in traditional Korean clothing and shouted that North and South Korea should be reunited just before he attacked Lippert. He also shouted that he opposed "war exercises", a reference to annual joint US South Korean military exercises that began this week.
"I carried out an act of terror," Kim shouted as he was pinned to the floor by event attendees.
Kim said while in police custody he had acted alone. South Korea's Yonhap news agency reported that Kim also said he was part of a group that had cut and burned a U.S. flag on the embassy grounds in Seoul in 1985.
Kim is a member of the pro-Korean unification group that hosted the event, police said. He also stages one-man protests against Japan over disputed islands known as Dokdo in Korean and Takeshima in Japanese. He was part of a small anti-Japanese demonstration on March 1 near the site of Thursday's attack, according to his blog.
"The guy comes in ... He yells something, goes up to the ambassador and slashes him in the face," witness Michael Lammbrau of the Arirang Institute think tank told Reuters.
Doctors at Yonsei University's Severance Hospital said they  treated Lippert for an 11-cm (4 inches) gash on the right side of his face and a puncture wound on his left wrist, causing nerve damage that was repaired. He will be hospitalised for three or four days, they said.
Police were at the venue as part of routine operations but not at the request of the U.S. embassy or the organiser, a police official said.
Lammbrau said Kim shouted about Korean independence while he was being restrained. "It sounded like he was anti-American, anti-imperialist, that kind of stuff," he said.
"The ambassador fought him from his seat ... There was a trail of blood behind him," Lammbrau said.
South Korean President Park Geun-hye, speaking in the United Arab Emirates, called it an "attack on the South Korea-US alliance."
Known for his open, informal style, Lippert is active on Twitter and can often be seen walking his basset hound, Grigsby, in Seoul. His wife recently gave birth to a son, who was given a Korean middle name.
 Thursday's event was hosted by the Korean Council for Reconciliation and Cooperation. The group later issued a statement in which it condemned the attack and apologised to the governments of the United States and South Korea.
The annual US-South Korean military exercises routinely provoke an angry response from North Korea, which denounces them as a preparation for war.
A South Korean defence ministry spokesman said the drills, due to run for eight weeks, would continue as planned.
Lippert was a US Senate aide to Obama and served in the US Navy in Afghanistan and Iraq, winning the Bronze Star. He was chief of staff for former Defense Secretary Chuck Hagel before taking up his post in Seoul in November.

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