A woman blew herself up and a suspected jihadist was killed during a major police assault in Paris targeting the possible mastermind of last week's attacks.

Key points: Police raid apartment in hunt for Paris attacks mastermind

Police raid apartment in hunt for Paris attacks mastermind A woman blew herself up and a suspected jihadist was killed

A woman blew herself up and a suspected jihadist was killed Police searched 118 houses and made 29 arrests

Police searched 118 houses and made 29 arrests All 129 victims in the Paris attack have now been identified

Gunfire and explosions rocked the Saint-Denis area in the north of the capital, near the Stade de France from before dawn, as terrified residents were evacuated or told to stay in their homes.

Authorities arrested seven people, while five police officers suffered minor injuries in the operation, which turned into a seven-hour stand-off between security forces and a group of people holed up in an apartment.

Black-clad elite police were seen hauling away a naked suspect in the streets.

After the raid, white-suited forensic experts swarmed the building as police tried to verify if Abdelhamid Abaaoud, the suspected mastermind of Friday's attacks in Paris that killed 129 people, had been in the apartment.

Abaaoud is an Islamic State fighter who was previously thought to be in Syria after fleeing raids in his native Belgium earlier this year.

France's interior ministry says police carried out 118 house searches, made 29 arrests and seized 34 weapons during the overnight searches.

Gunfire first rang out in the darkness about 4:00am local time in the streets close to where three suicide bombers had detonated their explosives outside the stadium at the start of Friday's attacks.

Residents of Saint Denis — some of whom were evacuated in their underwear — said they had been caught in a terrifying exchange of fire.

One woman named Hayat had been leaving a friend's apartment where she had spent the night when the shots erupted.

"I heard gunfire," the 26-year-old said.

"I could have been hit by a bullet. I never thought terrorists could have hid here.

Another resident named Sabrine, who was the downstairs neighbour from the raided apartment, said she could feel her whole building shake.

"We could see bullets flying and laser beams out of the window. There were explosions."

She told Europe 1 radio she heard the people above her talking to each other, running around and reloading their guns.

Another resident, Sanoko Abdulai, said that as the operation gathered pace, a young woman detonated an explosion.

"She had a bomb, that's for sure. The police didn't kill her, she blew herself up..." he told Reuters, without giving details.

French president Francois Hollande praised police for the "particularly difficult operation" and said he had asked for the state of emergency to be extended for a further three months.

"The aim was to neutralise overnight terrorists in Saint-Denis who have links with the perpetrators of the hideous crimes and attacks of Friday night," he said.

"These actions confirm to us, once again, that we are at war.

"Yes, the state of emergency means some temporary restrictions of one's liberties, but the idea is to have all the means to re-establish these liberties fully."

'There's been shooting, sounds of explosions'

ABC's chief foreign correspondent Philip Williams was on the scene of the raid, and said heavily armed police had swarmed the area.

"We saw just a moment ago, obviously special weapons police here with the sniper rifles. We also saw truckloads of army come in a short time ago," he said.

"This is a real operation. There's been shooting, there's been sounds of explosions and it's been like this for several hours.

"With those explosions we don't know what sort of explosions they were, who's instigated them, whether it's come from suspects or from the police or from the army here."

Dozens of soldiers had flooded into the area and heavily armed police were seen deploying along a street full of shops in the centre of the district, while ambulances and fire engines filled the streets.

Some residents were evacuated and authorities warned residents to keep away from windows.

Sorry, this video has expired Explosions ring out during Paris live cross ( Philip Williams )

Saint-Denis is near the Stade de France, one of several locations targeted in the attacks last Friday night.

The attacks, which have been claimed by Islamic State, left 129 people dead and more than 300 injured.

The French government has said that all 129 victims in the deadly attacks have now been identified.

Police say there were at least nine attackers, seven of whom died during the attacks, including six who detonated vests laden with explosives.

An international manhunt is underway for Belgian-born Salah Abdeslam and an unidentified man, believed to be the remaining attackers.

A source close to the inquiry said there was a possibility the unidentified man was on the run, unless he was one of two suspected accomplices currently being held in Belgium.

Daylight breaks during the raid. ( ABC )

French police have detained multiple suspects and continue to hunt for accomplices.

Another attacker was named as Omar Ismail Mostefai, 29, who was identified from a severed finger at the Bataclan concert hall.

The prosecutor's office said police had released family and friends of jihadists Ismael Mostefai and Samy Amimour, who blew themselves up in the Bataclan concert hall, where 89 were killed.

As police stepped up the hunt for the fugitives, French and Russian jets pounded IS targets in the group's Syrian stronghold of Raqqa for a third consecutive day.

A monitoring group said the French and Russian air strikes had killed at least 33 IS jihadists in the last 72 hours.

France and Russia have vowed merciless retaliation for the Paris attacks and last month's bombing of a Russian airliner over the Egyptian Sinai peninsula which killed 229 people and was also claimed by IS.

The attacks have galvanised international resolve to destroy the jihadist group and end Syria's more than four-year civil war, while potentially restoring ties between Russia and France that had collapsed since last year's Ukraine crisis.

Meanwhile, two Air France flights en route to Paris from the United States have been diverted after receiving anonymous threats to their security, the airline has said.

Air France confirmed via their Twitter account that both flights had landed safely.

French military move in on an anti-terrorism raid in Saint-Denis, Paris. ( ABC News: Barbara Miller )

AFP/Reuters