DAMMARTIN-EN-GOELE - French authorities circled a small northern town with anti-terrorist police and helicopters on Friday after at least one person was taken hostage there and the two main suspects in the Charlie Hebdo killings were sighted.

"We have indications of the presence of the terrorists whom we want to stop," Interior Minister Bernard Cazeneuve told reporters in Paris after a police source said a hostage-taking was going on within an industrial unit in the town.

"An operation is underway right now in Dammartin-en-Goele, which is mobilizing all services in the zone," Cazeneuve said, adding that further operations would be conducted in "the upcoming hours, upcoming minutes."

Dammartin-en-Goele is 40 km (25 miles) from the woodland zone where police had been hunting the two suspects on Thursday.

Earlier, gunshots rang out in the town and a police source reported that police had been chasing a vehicle on the nearby A2 motorway.