A police officer has been killed and two others are seriously injured after a gunman opened fire in one of the most popular areas of Paris.
The attacker got out of a car that pulled up next to a stationary police van on the Champs-Elysees and immediately started shooting at officers.
He then tried to run along the pavement, aiming at other officers and hitting two "very seriously", a French interior ministry spokesman said.
Other officers opened fire, killing the assailant.
An anti-terror investigation is under way into the attack in the heart of the French capital, which Islamic State says it carried out.
The extremist group has named the attacker as Abu Yusuf al Beljiki and suggested he was a Belgian.
Police have issued an arrest warrant for a second suspect who had arrived in the country by train from Belgium.
Security has been tight in the country, coming just days before the first round of France's presidential election on Sunday.
President Francois Hollande has said he was convinced the atrocity was terror-related.
The gunman struck close to a Marks and Spencer store on the Champs-Elysees, which is one of Paris' main shopping streets and an area popular with tourists.
A witness who identified himself as Chelloug said he heard six shots as the drama unfolded.
He said: "I thought they were firecrackers. In fact, he (the gunman) was hidden behind the van and shooting at the police. I think he hit a policeman. As soon as the policeman opened the door of the van, he fell."
Another witness identified only as Ines told French broadcaster BFM TV that she heard a shooting, saw a man's body on the ground and the area was quickly evacuated by police.
Despite the gunman being killed, police are still on high alert and officers have been seen pointing their weapons at members of public as they clear the area.
There had been reports one of the injured officers had died in hospital of his wounds but that was later denied by officials.
The gunman attacked as the officers were guarding an area near the Franklin Roosevelt metro station, not far from the Arc de Triomphe, on Thursday night.
A helicopter was seen hovering over the scene of the shooting as authorities searched the home of the gunman in the east of Paris.
Although an anti-terror probe has been opened, other reports said the shooting could have been an attempt at an armed robbery.
Sky's Mark White said: "All the indications are that it was a terrorist attack."
He added: "Two men were arrested a few days ago with an arsenal of weapons. And that there was a concern that an attack was being planned to coincide with the French election."
He went on: "The real concern as far as the authorities are concerned, given that we had arrests two days ago and now what looks to be terrorist-related incident is we may be experiencing a wave or some kind of coordinated effort to disrupt the French elections.
"The police investigation of these individuals led them to believe that a planned terrorist attack was due to take place imminently."
US President Donald Trump said: "It looks like another terrorist attack. What can you say? It just never ends. We have to be strong and we have to be vigilant, and I have been saying it for a long time."