A gunman demanding the release of the main suspect in the Paris 2015 terrorist attack took hostage on Friday a number of people at a supermarket in the southwestern town of Trebes.
Police said two people were killed in the incident, while Mayor Eric Menassi put the death toll at just one. He said that another person was wounded.
LCI TV said that 12 people were injured.
The hostage-taker was demanding the release of Salah Abdeslam, prime surviving suspect in the ISIS attacks in Paris that killed 130 people in November 2015, BFM TV said, citing an anonymous source.
The station reported that the hostage-taker has claimed allegiance to the ISIS terrorist group.
"All the information we have as I speak lead us to think that this would be a terrorist act," Prime Minister Edouard Philippe said.
The hostage-taker was now alone with one police officer in the supermarket and all other hostages had been freed, he added.
More than 240 people have been killed in France in attacks since 2015 by assailants who pledged allegiance to, or were inspired by, ISIS.
A police source had said earlier that eight people were being held hostage and that the hostage-taker had shot at a police officer.
Reuters pictures showed police in helmets and body armor in positions around the Super-U supermarket.
The Paris prosecutor's office said counter-terrorism prosecutors were investigating the incident but did not comment on the possible ISIS allegiance.
Earlier, the Interior Ministry had said security forces were carrying out an operation at a supermarket in southern France. Interior Minister Gerard Collomb was on his way.
"There is an ongoing situation ... in the town of Trebes, where shots have been heard and a man entrenched himself in a supermarket," Philippe said. "It's a serious situation."
Friday’s incident first developed when the suspect first fired six shots at police officers who were on their way back from jogging near the city of Carcassonne on Friday morning, said Yves Lefebvre, secretary general of SGP Police-FO police union.
One police officer had a shoulder injury but it was not serious, Lefebvre said.
The suspect then went to a Super U supermarket in Trebes.
