This was a part in "Once" a book based on the Holocaust and what happened was in the book the river turned red. I believe this happens as it was the blood from Jews and other victims who may have got shot while escaping or just killed.

With the amount, the Nazis killed it could be possible that this is the case or it could have been the sun playing a trick. It does not say why it is red but the best guess would be blood.

Felix first comes across this river when he is trying to find his way home and as he goes further up the river turns red. And Felix says it almost looks like blood.