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A French customs officer has reportedly been killed after a gunfight broke out this morning.

Two police officers were also wounded in the incident in the Saint Jean du Var region of Toulon, near Marseille, the French media has reported.

It allegedly happened at 11am (10am GMT) when officers carried out a raid to target arms traffickers.

The man, who was apparently armed with an M16 - a rifle used by the US military - and wearing a bulletproof vest, began shooting multiple times as he fled through the streets.

A police source told AFP one officer was is dead and two policemen injured during the operation.

A 33-year-old man has since been arrested by security forces in connection with the incident, according to Var-matin .

Another man is reportedly at large, according to Le Parisien.

Police have cordoned off the area while investigations are underway and residents have been asked to stay inside.

A witness at the scene told Var-matin: "I heard like an explosion. I turned and I saw people run away."

French media say the operation was linked to weapons smuggling in the city, which houses a major naval base in the south of France.

It comes just over a week after gunmen opened fire in Paris, killing 130 people and injuring hundreds.

ISIS later claimed responsibility for the attacks and raids have been carried out across France and Belgium in a bid to uncover any further planned assaults.

The French government has been under increasing pressure to prevent the flood of arms into the country and dozens of weapons have since been seized.

There has been almost 300 raids in Paris alone, according to police chief Michel Cadot.

Meanwhile more than 10,000 police and 6,400 soldiers have been deployed across the region, particularly at station, airports, large public spaces, government buildings, hospitals and cultural sites, The Local reported.

However, this morning's shooting is not believed to be connected to the Paris terror attacks, France3 reports.