Police have searched a home in a suburb east of Paris believed linked to the attack on police on the Champs Elysees.
A police document obtained by The Associated Press identifies the address searched in the town of Chelles as the family home of Karim Cheurfi, a 39-year-old with a police record.
Two police officials told The AP that the chief suspect in Thursday's attack is a 39-year-old from an eastern Paris suburb.
Police tape surrounded the quiet, middle-class neighbourhood in Chelles early on Friday, and worried neighbours expressed surprise at the searches.
Archive reports by French newspaper Le Parisien say that Cheurfi was convicted of attacking a police officer in 2001.
The raids took place shortly after a policeman was shot dead on the Champs Elysees on Thursday night (local time).
Two other police officers were wounded after a gunman opened fire with an automatic weapon before he was himself was killed by officers.
Islamic State claims responsibility
Islamic State has claimed responsibility for the shooting, just days before French presidential elections, via its Amaq news agency which said the attacker was Belgian.
President Francois Hollande said he was convinced it was a terrorist attack.
A second suspect who might have been involved in the incident on the Champs Elysees shopping boulevard may still be on the loose, authorities said.
French police officials say the alleged attacker had been flagged as an extremist.
A French Interior Ministry spokesman said a second policeman had not died of his wounds from an attack in Paris, as had been earlier reported.
"An automatic weapon was used against police, a weapon of war," the spokesman, Pierre-Henry Brandet, told reporters, adding that the "terrorist threat" in the country remained high.
Mr Brandet said the shooting started at shortly after 9pm when a car stopped alongside a stationary police car.
"A man immediately got out and opened fire on the police car, fatally wounding a police officer... He also wounded a second one, it would seem very seriously," he said.
Officers targeted - Interior Ministry
The officers were deliberately targeted in the fatal shooting, but it is too early to say what the motive was, Mr Brandet says.
A police source told Reuters there had been two assailants, while a witness saw one man get out of a car at the scene and begin shooting with a machine gun.
Three police sources also told Reuters it could have been an attempted armed robbery on one of the world's most expensive streets.
Police earlier said it was very probably "a terrorist act".
A police union Twitter account tweeted the police officer was shot while in a car stopped at a red light by an attacker driving by.
Yvan Assioma of the police union Alliance says other officers were hit during the shooting, but the bullets were stopped by their bulletproof vests.
Paris police spokeswoman Johanna Primevert told The Associated Press the attacker targeted police guarding the area near the Franklin Roosevelt subway station.
Nearby shops and restaurants locked their doors with staff and customers still inside, the Telegraph reports.
Police urged the public to avoid the area as hundreds of heavily armed police are reported to be out in force on the Champs Elysee.
There are unconfirmed reports of a second shooting in another part of the city, however, AM Show France correspondent Elaine Corrie says police have asked people to not spread rumours.
"Frequently when there's an attack, people think they're hearing shots elsewhere. We haven't been able to confirm whether there was a second incident."
A Reuters reporter saw a helicopter flying low over central Paris, apparently part of a follow-up police operation.
French TV channel BFM broadcast footage of the Arc de Triomphe monument and top half of the Champs-Elysees packed with police vans, lights flashing and heavily armed police shutting the area down after what was described by one journalist as a major exchange of fire nears a Marks and Spencers store.
The incident came as French voters prepared go to the polls on Sunday in the most tightly-contested presidential election in living memory.
France has lived under a state of emergency since 2015 and has suffered a spate of Islamist militant attacks that have killed more than 230 people in the past two years.
Earlier this week, two men were arrested in Marseille whom police said had been planning an attack ahead of the election.
A machine gun, two hand guns and three kilos of TATP explosive were among the weapons found at a flat in the southern city along with jihadist propaganda materials according to the Paris prosecutor.
Reuters / Newshub.
