The two brothers accused of the Charlie Hebdo massacre have been killed as police launched an assault at a print works in the town of Dammartin-en-Goele, where the pair had been holding a hostage.

After a day of drama which saw Chérif and Said Kouachi cornered on an industrial park in the town north-east of Paris, gunfire erupted at 5pm (4pm GMT). French TV reported that a female hostage escaped unharmed.

A 30 second burst of small arms fire was followed by two loud explosions which echoed out over the town as dusk fell. Further gunfire followed with one last muffled explosion two minutes later.

Police had been attempting to make contact with the two suspects wanted over the killing of 12 people at the Paris offices of French satirical magazine Charlie Hebdo as they held at least one hostage at a print works building at an industrial estate north of Paris. Witnesses say the pair may have a rocket-propelled grenade.

Local media reported that the brothers, Cherif and Said Kouachi, had told police they were prepared "to die as martyrs".

Further explosions were heard at the site of a second siege at a kosher grocery in the east of Paris itself, where the gunman thought to be responsible for Thursday's fatal shooting of a female police officer had reportedly taken at least five hostages. Le Monde reported that the gunman, thought to be Amedy Coulibaly, has been killed.

Police sources told the French news agency AFP that "at least two" people had been killed in a shoot-out at the start of the supermarket hostage-taking.

The gunman, thought to be 32-year-old Amedy Coulibaly, was threatening to kill hostages if police launched an assault on the Kouachi brothers, a police official told the Associated Press.

A police source told The Independent that there were believed to be five hostages with Coulibaly inside the supermarket, while at least one shop employee had escaped.

It was later confirmed that the hostages at the Porte de Vincennes supermarket included women and children. Police said the gunman had two kalashnikov-type automatic weapons.

At least three ambulances entered the town of Dammartin-en-Goele, just north of Charles de Gaulle airport and 25 miles north-east of central Paris, shortly before 10.20am, followed by several car loads of balaclava-clad specialist counter-terror officers in unmarked vehicles.

The spokesman for the French interior minister Pierre-Henry Bandet earlier said: “We want to make contact with (the brothers). We want to end the siege as peacefully as we can… It would be misleading to say that negotaitions are in progress. But there is no question of an immediate assault.”

Convoys of police vehicles were seen flowing out of central Paris towards the town, which sits some 20 miles from the capital near Charles de Gaulle airport.

Checkpoints were put in place at motorway intersections heading into Paris. At one location armed officers could be seen on the A2 motorway itself, watching traffic coming towards the capital.

Five police helicopters hovered overhead. Heavily armed elite police units surrounded the area. Local people were ordered to stay indoors.

Siege is underway in Dammartin-en-Goële (highlighted in red, top-right)

The entrance to the small industrial estate where the suspects were holed up was blocked by police around 800 metres from the large white building believed to be housing the men.

Workers from estate spoke of their astonishment as a fast-moving police operation descended on the quiet town shortly before 9am (8am GMT).

Stéphane Gonzalez, a van driver who had been due to relieve a colleague, told The Independent: “Suddenly there were about five helicopters in the air and dozens of police everywhere. There was a lot of shouting and activity. Within minutes the place was shut down and people evacuated.”

Earlier, Cherif and Said Kouachi, were reported to have hijacked a Peugeot car near the small town of Crepy-en-Valois, which was at the epicentre of a massive police hunt yesterday. They were pursued for 30 miles south along the N2 trunk road by gendarmerie cars and took refuge in the print works.

Shots were fired, but earlier reports of two deaths were denied by the Paris chief prosecutor's office.

In pictures: Charlie Hebdo suspects siege Show all 25 1 /25 In pictures: Charlie Hebdo suspects siege In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting French special forces sharp shooters take position on a rooftop of the complex at the scene of a hostage taking at an industrial zone in Dammartin-en-Goele, northeast of Paris In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting Special Forces sniper works on a roof the building on an industrial estate where it is thought the suspects linked to the Charlie Hebdo massacre are holding a hostage in Dammartin en Goele In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting Police take up a position on a roof in Dammartin-en-Goele, north-east of Paris, where two brothers suspected of slaughtering 12 people in an Islamist attack on French satirical newspaper Charlie Hebdo held one person hostage as police cornered the gunmen In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting Moment of explosion at Dammartin en Goele In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting Smoke rises from a building in Dammartin-en-Goele, north-east of Paris, where two brothers suspected of slaughtering 12 people in an Islamist attack on French satirical newspaper Charlie Hebdo held one person hostage as police cornered the gunmen In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting French gendarmes secure the roundabout near the scene of a hostage taking at an industrial zone in Dammartin-en-Goele, northeast of Paris In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting Members of the French intervention gendarme forces arrive at the scene of a hostage taking at an industrial zone in Dammartin-en-Goele, northeast of Paris In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting French gendarmes block the access to the city of Dammartin-en-Goele where two brothers suspected of slaughtering 12 people in an Islamist attack on French satirical newspaper Charlie Hebdo held one person hostage as police cornered the gunmen In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting Officers of the french Special Police Forces look for the suspects linked to the 'Charlie Hebdo' attack near Dammartin-en-Goelle In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting French gendarmes secure the roundabout near the scene of a hostage taking at an industrial zone in Dammartin-en-Goele, northeast of Paris In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting French gendarmes patrol in Dammartin-en-Goele In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting Ambulances arrive in Dammartin-en-Goele, northeast Paris, as part of an operation to seize two heavily armed suspects In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting A police officer stands along a road near an industrial area where the suspects in the shooting attack at the satirical French magazine Charlie Hebdo headquarters are reportedly holding a hostage, in Dammartin-en-Goele, some 40 kilometres north-east of Paris In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting A French police officer stands on the roof of a building where two brothers suspected of slaughtering 12 people in an Islamist attack on French satirical newspaper Charlie Hebdo held one person hostage as police cornered the gunmen, in Dammartin-en-Goele In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting A French Army helicopter with intervention forces hovers near the scene of a hostage taking at an industrial zone in Dammartin-en-Goele, northeast of Paris In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting Helicopters of the French Special Police Forces waits in a field surrounding an industrial estate where it is thought the suspects linked to the Charlie Hebdo massacre are holding a hostage in Dammartin en Goele In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting Police and army forces take positions in Dammartin-en-Goele, northeast Paris, as part of an operation to seize two heavily armed suspects In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting Police vans are lined up in Dammartin-en-Goele, northeast Paris, as part of an operation to seize two heavily armed suspects In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting French police patrol in Dammartin-en-Goele where a hostage-taking was underway after police hunting the Islamist brothers who killed 12 people in Paris, exchanged fire with two men during a car chase In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting Police officers gather to prepare an assault in an industrial area where the suspects in the shooting attack at the satirical French magazine Charlie Hebdo headquarters are reportedly holding a hostage, in Dammartin-en-Goele, some 40 kilometres north-east of Paris In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting French police and gendarmes patrol in Dammartin-en-Goele where a hostage-taking was underway after police hunting the Islamist brothers who killed 12 people in Paris, exchanged fire with two men during a car chase In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting A helicopter of the French Gendarmerie flies over Dammartin-en-Goele where a hostage-taking was underway after police hunting the Islamist brothers who killed 12 people in Paris, exchanged fire with two men during a car chase In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting A member of French special forces stands on the roof of a building as a hostage-taking was underway after police hunting the Islamist brothers who killed 12 people in Paris, exchanged fire with two men during a car chase In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting A helicopter flies over Dammartin-en-Goele where a hostage-taking was underway after police hunting the Islamist brothers who killed 12 people in Paris, exchanged fire with two men during a car chase In pictures: Charlie Hebdo suspects siege Charlie Hebdo shooting Police officers stop a car at a check point outside Longpont

The print works - belonging to a company called Création Tendance Découverte (CTD) – was rapidly surrounded by units of the police and gendarmerie elite police forces, Raid and GIGN.

The mayor of Othis, a neighbouring village, told Le Monde that CTD has five employees, including the owner, his wife, the couple's son and a graphic designer. He said he fears the siege will end in a "bloodbath".

A travelling salesman told France Info radio that he was visiting the print works when the fugitive brothers entered this morning. “I shook hands with one of them and said hello,” the man said. “He replied, ‘Monsieur, we don’t kill civilians”

The salesman continued: “I am going to buy a lottery ticket. This is the luckiest day of my life.”

Schoolchildren in Dammartin-en-Goële were ordered to stay indoors and away from widows. “Some kids are crying. Others are trying to calm people. We are trying to laugh so that we are not scared,” one teenaged girl told Le Figaro.

Police sources gave The Independent more details of the earlier car hijacking. They said that the brothers had hijacked a grey Peugeot at about 8am from a woman driver near Crepy-en-Valois. They had made the woman leave the car at gunpoint but had not harmed her.

When she raised the alarm, gendarmerie cars pursued the brothers south on the N2 until they were cut off by road-blocks in Dammartin. After a gun battle with police and gendarmes, the brothers took refuge in the print works, which employs five people.

One pupil in the local school tweeted: “Gun fire next to my so normal school! We are locked up and forbidden to go out.”

Members of the French gendarmerie intervention forces arrive at the scene of a hostage taking at an industrial zone in Dammartin-en-Goele (Reuters)

The mayor of Montagny-Sainte-Félicité, a village 30 miles north of the siege, gave more details on the car hijacking. Jean-Paul Douet said a local school teacher was arriving at the school at 8.10 am when the car in front was held up by the two brothers.

"She saw their weapons and especially a grenade launcher. They signalled to her to drive on and then sped away in a grey Peugeot 206."

The French interior minister, Bernard Cazeneuve, confirmed that an “operation” was in progress at Dammartin-en-Goële.

President Francois Hollande cut short a crisis cabinet meeting on the Charle Hebdo affair to go to the incident room at police headquarters.

He walked the short distance from the Elysee Palace to the interior ministry for a briefing on the siege in what seemed to be a deliberate gesture to reassure Parisians that there is no constant terrorist threat.

Addressing the nation this evening, he said France would emerge "even stronger" from the tragedies of the past three days.

"We are a free nation and we are a nation that is not scared, that is not frightened," he added.

“I call you to unite. This is our best weapon - we must show our determination against anything that may divide us. To be implacable in the face of racism and anti-Semitism.”

All flights in and out of Charles de Gaulle airport, ten miles away, were diverted to runways and taxiways on the south side of one of the busiest airports in the world. This measure was taken “as a precaution”, an official said, to avoid conflicts between aircraft and the five police helicopters hovering over the siege scene.

At the second scene in the Porte de Vincennes area in eastern Paris, the man believed to have been responsible for an apparently random shooting of a policewoman on Thursday was reported to have barricaded himself inside a kosher grocery store with several hostages.

One French radio station said that the man had taken several hostages at the Hyper Kacher supermarket and was refusing to release them until the Kouachi brothers were allowed to flee the police siege further north.

Local people said they had heard prolonged gunfire. Heavily armed police units cordoned off surrounding streets.

Earlier, the French news agency reported that the man sought for Thursday’s killing had been identified and was thought to have links with the Kouachi brothers. He is described as a man of African appearance in his 30s.