The hunt for the mastermind of the Paris attacks took an extraordinary twist today when it emerged that he was believed to be hiding in a flat in the French capital, which became the scene of a deadly police raid.

Two people are reported to have died - including a woman in a suicide vest who is thought to have blown herself up - while another five were arrested as heavily armed units launched an operation targeting Islamic State militant Abdelhamid Abaaoud.

One person is still understood to be holed up in the apartment in the suburb of Saint-Denis in the north of the city, close to the Stade de France national stadium, where three terrorists struck during Friday night's massacre in which 129 people were killed.

Swat teams detained three people at the property, while another man and woman were held nearby, prosecutors said.

The woman wearing the suicide vest detonated the explosives as scores of officers raided the apartment, officials said.

Stunned residents were evacuated from the area as scores of heavily armed officers flooded the streets.

Abaaoud, from Belgium, has been named by French officials as the man behind Friday's attacks and was initially believed to be in Syria.

Police anti-terrorist officers raided the Saint-Denis apartment in a pre-dawn operation and a shoot-out followed. Sources said four police officers were injured.

The area's deputy mayor, Stephane Peu, told French television it was not a new terrorist attack and warned residents to stay indoors.

Authorities are also searching for two more extremists suspected of taking part in Friday's attacks.

News of a second unidentified terrorist thought to be directly involved in the Paris atrocity emerged after CCTV indicated there were three extremists involved in the attack on bars in the city.

It would take the total number of attackers to nine, with seven dead and the eighth surviving gunman, Salah Abdeslam, the subject of an international manhunt.

At least seven explosions were heard at the scene of today's stand-off in Rue du Cornillon, in the heart of the historic multicultural area north of the city centre.

The disclosure that Abaaoud is believed to be in Paris poses new questions about how the attackers, a number of whom were on the radar of authorities already, were able to avoid detection.

The 27-year-old has previously boasted of how he evaded police attempts to foil his terror plans before giving an interview to the Islamic State English-language magazine Dabiq which suggested he was in Syria. His whereabouts since that interview in February had remained unknown.

Belgian authorities had suspected Abaaoud of being the head of a terror cell which was smashed in January in the wake of the attack on French satirical magazine Charlie Hebdo.