A man who swore allegiance to Islamic State and had been sentenced for jihad links has murdered a French policeman outside his home in Paris.
Witnesses told investigators the man may have shouted "Allahu Akbar" as he stabbed the policeman in the suburb of Magnanville.
The attacker then held the 42-year-old policeman's wife and the couple's three-year-old son hostage inside the home.
Explosions were heard at the scene as heavily-armed police moved in following failed negotiations with the RAID elite police unit.
Officers discovered the body of the policeman's wife inside after storming the house.
The attacker was killed during the police operation, according to French interior ministry spokesman Pierre-Henry Brandet.
France's interior minister Bernard Cazeneuve described the killing of the officer as "an appalling terrorist attack" and said more than 100 people seen as potential threats have been arrested in recent weeks.
The threat "is high in France, it's high in Europe, it's high in the Western world as shown by the events that happened 48 hours ago in the United States," Mr Cazeneuve added.
Unconfirmed reports have named the suspect as Larossi Abballa, 25, adding he had been jailed for three years in 2013, six months of which were suspended, for "criminal association with the aim of preparing terrorist attacks", in a trial with seven other defendants.
The couple's son was "in shock but unharmed", a prosecutor said.
The Amaq News Agency, which is linked to IS, claimed the attack was carried out by an "Islamic State fighter".
French prosecutors have launched an anti-terror investigation.
A source told the AFP news agency: "The anti-terror department of the Paris prosecution service is taking into account at this stage the mode of operation, the target and the comments made during negotiations with the RAID."
President Francois Hollande said in a statement that he "strongly condemned this odious act".
"A police commander and his partner, a civil servant at the interior ministry, were shamefully murdered this evening," Mr Hollande said.
"All light will be shed on the circumstances of this terrible tragedy," he added.
Senior government officials will meet at the presidential palace early today to discuss the attack.