Charlie Hebdo Attack: Suspects Holding At Least One Hostage

The hostage drama unfolded at a printing business in the small town of Dammartin-en-Goele, only 12 kilometres (seven miles) from Paris's main Charles de Gaulle airport, police sources said. (Charlie Hebdo Suspects Holed Up in Building Near Paris Airport: 10 Developments)

Interior Minister Bernard Cazeneuve confirmed that an operation was under way to "neutralise" the suspects as the massive manhunt appeared to be reaching a dramatic climax with helicopters buzzing overhead.

Prior to the standoff, the suspects had hijacked a Peugeot 206 nearby from a woman who said she recognised them as the brothers, Cherif and Said Kouachi, accused of killing 12 people in Wednesday's attack on the satirical weekly Charlie Hebdo, which repeatedly lampooned the Prophet Mohammed.

The attack was France's deadliest bloodbath in half a century.

Prosecutors told AFP there had been no casualties in the shoot-out.

The frantic search for the pair came as it emerged they had been on a US terror watch list "for years".

And as fears spread in the wake of the attack, the head of Britain's domestic spy agency MI5 warned that Islamist militants were planning other "mass casualty attacks against the West" and that intelligence services may be powerless to stop them.

Wednesday's bloodbath at the satirical magazine Charlie Hebdo in Paris has sparked a global chorus of outrage, with impromptu and poignant rallies around the world in support of press freedom under the banner "jesuischarlie" (I am Charlie).

US President Barack Obama was the latest to sign a book of condolence in Washington with the message "Vive la France!" as thousands gathered in Paris on a day of national mourning Thursday, and the Eiffel Tower dimmed its lights to honour the dead.