Police have surrounded a building in northern France where Charlie Hebdo massacre suspects Cherif and Said Kouachi are said to have a hostage.
Shots have been fired and several people are said to have been wounded in Dammartin-en-Goele, 22 miles from Paris.
The development comes nearly 48 hours after the attack on Charlie Hebdo‘s office, when 12 people were shot dead.
The heavily armed gunmen fled Paris by car after the attack.
The attackers, who shouted Islamist slogans, are believed to have been angered by Charlie Hebdo‘s irreverent depictions of the Prophet Muhammad.
They are said to have shouted “We are al-Qaeda, Yemen”, an apparent reference to the al-Qaeda in the Arabian Peninsula group (AQAP).
In the US, a senior official has told reporters that one of the two brothers alleged to have carried out the attack, Said Kouachi, spent “a few months” training in Yemen with the group.
Said Kouachi and his younger brother, convicted terrorist Cherif Kouachi, were on a US no-fly list before the attack, a US counter-terrorism official told the New York Times.
In Dammartin, witnesses say police are protecting people in buildings close to the siege of a printing firm building.
Officers from the elite GIGN unit have told people working nearby to stay inside and turn lights off while the operation is going on.
People in the area say police helicopters began arriving around 08:45 local time followed by convoys of armed officers.
Some of those in premises in the industrial area where the suspects are cornered have been evacuated.
Police and military helicopters continue to hover low over the area, while lines of armed officers are guarding the edge of the national highway were traffic continues to flow.
The security situation at the town of Dammartin-en-Goele has affected flights at the main airport in Paris, which is in the vicinity. Officials at Paris Charles de Gaulle airport say they have changed landing and take-off patterns for aircraft in the light of the security situation.
Meanwhile, police are said to have identified a suspect in Thursday’s fatal shooting of a policewoman in Montrouge, south of Paris.
AFP quotes a source close to the investigation as saying that two people in his immediate circle have been taken into custody.
