The mastermind of the Paris attacks is believed to be the target of a police siege at an apartment block in the city, according to reports.
Abdelhamid Abaaoud, from Belgium, has been named by French officials as the man behind the massacre of at least 129 people and was initially believed to be in Syria.
Police anti-terrorist officers raided an apartment in the Saint-Denis suburb just north of the city centre in a pre-dawn operation and a shoot-out followed.
Several people suspected of Friday's deadly attacks were surrounded and French media reported at least one had been killed and another in a suicide vest had been arrested.
The Paris police department said officers exchanged gunfire with the suspects in Saint-Denis and several officers were injured.
The area's deputy mayor Stephane Peu told French television it was not a "new attack" and warned residents to stay indoors.
Authorities are also searching for two extremists suspected of taking part in last Friday's attacks.
News of a second unidentified terrorist thought to be directly involved in the Paris atrocity emerged after CCTV indicated there were three extremists involved in the attack on a bar in the city.
It would take the total number of attackers to nine, with seven dead and the eighth surviving gunman, Salah Abdeslam, the subject of an international manhunt.