FRENCH Interior Minister Gerard Collomb has confirmed three people were killed and up to 16 injured in a terror-inspired hostage situation at a supermarket in southern France.

The hostages were taken Friday morning local time, by a gunman named as Redouane Lakdim, a small time drug dealer.

It is reported 26-year-old Lakdim, a French citizen born in Morocco, hijacked a car, injuring the driver and shooting the passenger in the head, near the popular tourist location of Carcassonne.

He is then thought to have fired on four police officers who were out jogging, wounding one in the shoulder, before driving to the nearby town of Trebes where he took up to 50 people hostage in a supermarket.

Le Parisian reports Lakdim was known to authorities and carried out the deadly attack after dropping his little sister at school.

Neighbours said the young man who lived with his parents and three sisters seemed “calm” and “nice”.

Two people were killed in the supermarket, local media reports. Some of the hostages had escaped while Lakdim was inside and the majority of others were later released with one military officer trading himself for a female hostage.

“He saved lives and did honour to his corps and his country,” French President Emmanuel Macron said of the officer after a meeting with Prime Minister Edouard Philippe and security officials.

“Now he is fighting against death and all our thoughts are with him and his family.”

Portugal’s government said Friday that a Portuguese citizen was one of the three people killed.

“The death of a Portuguese citizen has been confirmed ... by French authorities to our consular services,” Miguel Silva, a spokesman for the department concerned with Portuguese living abroad, told AFP.

Portuguese President Marcelo Rebelo de Sousa expressed his condolences to the family and friends of the victim in a statement published late Friday on the presidency website.

The 26-year-old attacker is said to have demanded the release of Paris attacker, Salah Abdesalam, according to BFM TV. Moroccan-Belgian national Abdeslam is the prime surviving suspect in the attacks in Paris that killed 130 people.

Trebes mayor, Eric Menassi, also told French television that the man entered the shop yelling: “Allahu Akbar, I’ll kill you all”.

President Macron said: “Everything leads us to believe it is a terror attack” and French prosecutors say they are treating the hostage-taking as a terror incident.

EU leaders also expressed solidarity with France, with European Commission chief Jean-Claude Juncker saying: “France has again been hit by a cowardly and bloody act, after having previously been hit hard by terrorism.

“I express in my own name and that of the entire Commission all our feelings and our full support to the French authorities and French people,” he said.

The Islamic State has claimed responsibility for the act on a jihadist website, in a common pattern following lone-wolf attacks.

Secretary-general of SGP Police-FO police union Yves Lefebvre said the man first fired six shots at police on their way back from a morning run near Carcassonne.

The suspect then went to a Super U supermarket in the nearby small town of Trebes, Lefebvre said.

If the link to Islamic State is confirmed, the attack would be the first major incident since the election of centrist President Emmanuel Macron in May last year.

More than 240 people have been killed in French attacks since 2015, by people who claim allegiance to Islamic State or are inspired by the group.

The shootings come with France still on high alert after a string of jihadist attacks since 2015, starting in January that year with the assault on satirical magazine Charlie Hebdo that left 12 people dead.

France also suffered major attacks in Paris in November 2015 when IS jihadists killed 130 people at bars, restaurants, the Bataclan concert venue and the national stadium.

In July 2016, in another attack claimed by IS, a man drove a truck through revellers celebrating Bastille Day, killing 84 people.

A state of emergency put in place just after the Paris attacks was finally lifted in October last year, but soldiers continue to patrol major tourist sites and transport hubs under an anti-terror mission.

— With wires