Armed police have surrounded the Charlie Hebdo killers after they seized a hostage and are now holed up in a business premises near a Paris airport.
Al Qaeda gunmen Said Kouachi, 34, and his brother, Cherif, 33, have reportedly told police negotiators: 'We are ready to die as martyrs'.
The hostage being held is believed to be a woman, a police source said.
They are surrounded in the village of Dammartin-en-Goele, around 25 miles from the capital.
Officials denied earlier reports that two people had been killed when the gunmen exchanged fire with police on a dramatic car chase earlier this morning. But police confirmed a hostage had been taken.
Snipers have their weapons trained on the building and helicopters are hovering overhead as negotiations were underway with the Islamic fanatics.
Runways have been closed at Charles de Gaulle airport, around five miles away over fears the gunmen have rocket launchers capable of bringing down an aircraft. Schools are also in lockdown.
One of the pupils inside the Dammartin-en-Goele high school said by phone from inside: 'We are scared. We’ve called our parents to make sure they’re OK.
'We've been told we have to stay inside. All the lights have been switched off.’
Carole Morais, who works in the town hall, said: ‘We’re locked in, and following events on the internet’.
After a meeting with President Francois Hollande when news of the pursuit broke, politician Nicolas Dupont-Aignan said: ‘It’s time to terrorise the terrorists.’
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