Heavy gunfire was reported for several hours beginning around 4:30 a.m. local time (10:30 p.m. ET Tuesday) in the northern Paris suburb of Saint-Denis. Another person was also killed while seven others were arrested during the operation.
A woman detonated a suicide vest as the apartment was stormed, according to the Paris Prosecutor's Office. It was not immediately clear how the second person died.
Five police officers and a passerby were injured during the incident. A police dog named Diesel was also killed.
Officials confirmed that Abdelhamid Abaaoud, a Belgian jihadist who is suspected of being a lynchpin in the assaults that killed 129 people in Paris on Friday, was one of several people targeted by the raid. However, it was not immediately clear whether Abaaoud was among those arrested or was ever in the apartment.
Veronique Haounoh, 43, was holed-up in an apartment across the street from the operation with several neighbors and heard "explosions at irregular intervals."
"We heard so many booms," she told NBC News. "I'm shaking. We are very scared, I can't stop crying."
Witness Abdel Nour al Jazaeri, an unemployed Algerian immigrant, told NBC News that he saw police raiding a building and heard intense gunfire beginning at 4:30 a.m.
A local resident who lives nearby said that he heard "lots of shots" between 4:30 a.m. and 6:30 a.m. local time.
"I was sleeping," said the man, who identified himself only as Alexandre. "I heard the noise — the shots. I said, 'That's not fireworks'."
Some people who lived nearby were escorted by police from their homes straight out of their beds clad in just their underwear or pajamas.
Saint-Denis is a low-income area that's close to the Stade de France, a 81,000-seat venue which was targeted by three suicide bombers during a game involving the national team and Germany on Friday.
Police said they followed a female suspect who was believed to have a connection to the terrorists behind Friday's attack to the property in Saint-Denis. The subsequent operation involved 110 officers from France's elite RAID unit.
Local resident Jawad Ben Dow told Reuters that the standoff was centered on his apartment.
Mathieu Hanotin, a local lawmaker, described the operation as a "big victory."
When asked if he thought the suspects at the apartment were planning another attack, Hanotin said that remained unclear but added their weapons showed "they were ready."
Authorities have been searching for two more suspects believed to have directly participated in Friday's series of bombings and shootings. Seven attackers were killed, most in suicide bombings, officials said.
Police had already been looking for known accomplice Salah Abdeslam, 26. French officials told The Associated Press that an analysis of the attacks indicated one additional person directly involved in the onslaught remains unaccounted for.
On Tuesday, two Air France passenger jets leaving from the U.S. for Paris were diverted after bomb threats were phoned in, the airline said.
Both planes landed safely — a flight from the Washington, D.C., area in Halifax, Nova Scotia, and a plane from Los Angeles in Salt Lake City, Utah, officials said.
Earlier, a soccer stadium in Germany packed with thousands of fans was abruptly evacuated because of a "potential threat to spectators," police said.
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