A female suspect blew herself up with a suicide belt, a prosecutor says. Some reports suggest two suspects died. There were explosions and gunfire in the operation, which is continuing.
Five people have also been arrested.
The focus of the operation is Abdelhamid Abaaoud, the alleged mastermind of the ISIS-claimed attacks that killed 129 people in Paris on November 13.
Roads have been blocked off around Rue de la Republique in Saint-Denis, in the same district as the Stade de France where suicide attackers detonated bombs.
Truckloads of soldiers joined armed police at the scene.
At least five people were believed to have been in the targeted third floor flat in Rue de La Republique, French media report.
The Paris prosecutor’s office said in a statement that the raid started at 04:20 local time and was still ongoing.
A woman inside the apartment set off an explosives vest at the beginning of the raid and died.
Three men who were also in the apartment have been detained by anti-terrorist police.
A man and a woman were stopped and detained close to the apartment, police said.
There are unconfirmed reports that one person remains holed up in the flat. Other unconfirmed reports have put the death toll at between two and three.
Several police officers are reported to have been wounded in the operation.
Earlier, Deputy Mayor Stephane Peu urged local residents to stay indoors, saying “it is not a new attack but a police intervention”.
Abdelhamid Abaaoud, a 27-year-old Belgian of Moroccan origin, had been thought to have organized last week’s attacks from Syria, but is now believed to have been one of those in the St Denis apartment.
Security sources have said surveillance video showed a possible ninth assailant during the attacks.
The video reportedly shows a third figure in the car carrying the group which attacked several bars and restaurants.
It is not clear if this ninth attacker is one of two suspected accomplices detained in Belgium or is someone still on the run.
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