Heavily armed French SWAT teams swooped and neutralised a cell that was planning to launch new terror attacks, firing 5,000 rounds during an hours-long battle that left at least two people dead, including a woman who exploded an explosives belt, a prosecutor said.
The raid had targeted the suspected planner of the attacks, 27-year-old Abdelhamid Abaaoud, but his fate remained unclear.
Paris prosecutor Francois Molins said the identities of the dead were still being investigated, but that neither Abaoud nor the fugitive attacker Salah Abdeslam was in custody.
"At this time, I'm not in a position to give a precise and definitive number for the people who died, nor their identities, but there are at least two dead people," he told reporters.
Mr Molins said heavily armed police squads initially were thwarted by a reinforced door to the apartment in the Saint-Denis neighbourhood north of Paris and faced nearly incessant fire as they worked to enter.
Earlier, he said the raid was launched after information from tapped telephone conversations, surveillance and witness accounts indicated that Abaaoud might be in a safe house in the Saint-Denis suburb.
Investigators have identified Abaaoud, a Belgian of Moroccan descent, as the chief architect of Friday's attacks in Paris, which killed 129 people and wounded 368 others.
A US official briefed on intelligence matters said Abaaoud was a key figure in an Islamic State external operations cell that US intelligence agencies have been tracking for months.
Abaaoud is believed to have escaped to Syria after a January police raid in Belgium, but he has bragged in Islamic State propaganda of his ability to move back and forth between Europe and Syria undetected.
The site of Wednesday's raid is just over a mile from the Stade de France football stadium. Three suicide bombers blew themselves up outside the stadium during an international soccer match on Friday.
They were one of three teams of attackers who also targeted a rock concert at the Bataclan theatre as well popular night spots in a trendy Paris area. The Islamic State group has claimed responsibility for the carnage, which has left France in mourning.
On Wednesday, residents of the Saint-Denis area were awakened by an explosion at around 4.20am.
Amine Guizani said the blast was followed by the sound of grenades and automatic gunfire.
"It was continuous. It didn't stop," he said. "It lasted from 4:20 until 5:30. It was a good hour. I couldn't say how many shots were fired, but it was probably 500. Hundreds, definitely. There were maybe 10 explosions."
Police cordoned off an area around the building in a narrow street lined with low-rise buildings. Riot police cleared people from the streets, pointing guns at residents to move them off the roads.
Mr Molins said the operation began with a pre-dawn shoot out and resulted in the arrest of eight people, including two found in the rubble and the man whose apartment was used as the cell's hideaway.
Several police officers were slightly injured and a SWAT team police dog was killed in the operation. The National Police said in a tweet that the seven-year-old Belgian Malinois named Diesel was "killed by terrorists".
Neither Mr Molins nor French Interior Minister Bernard Cazeneuve would say whether some attackers might still be on the loose.
French authorities had previously said that at least eight people were directly involved in the bloodshed: seven who died in the attacks and one, Salah Abdeslam, who got away and slipped across the border to Belgium. A Spanish security official said Wednesday that French authorities have sent out a bulletin to police across Europe asking them to watch out for a Citroen Xsara car that could be carrying Abdeslam.
French officials have told AP they believe at least one other attacker was involved in Friday's carnage and is still at large, taking the number to at least nine.
Surveillance video obtained by AP also indicates that a team of three attackers carried out the shootings at one of the cafes. The video was among evidence authorities used in concluding that at least one other attacker was on the loose.
The brief clip shows two black-clad gunmen with automatic weapons calmly firing on the bar then returning toward a waiting car, whose driver was manoeuvering behind them. Authorities believe the car is the same black Spanish-made SEAT vehicle that was found Saturday with three Kalashnikovs inside.
The discrepancy in numbers adds to questions about how the cell was able to carry out its plot undetected.
The Paris attacks have galvanised international determination to confront the Islamic State group in Syria and Iraq, bringing France, Russia and the United States closer to an alliance.
Speaking after Wednesday's raid, French President Francois Hollande praised the bravery of the security services and said that France was "at war" with IS, which he called a global threat.
"It is the entire country that's been attacked," Mr Hollande told a gathering of French mayors. "For what it represents, the fight we are leading to eradicate terrorism. And simply for what we are."
French fighter jets attacked IS targets in Syria for a third night, the defence ministry said. Mr Hollande said French aircraft carrier Charles de Gaulle had left to support military operations against IS in Syria.
He called for a "large coalition" against IS militants to destroy a group that threatens the whole world and "commits massacres" in the Middle East.
France's justice minister updated the overall number of wounded in the Paris attacks to 368 people, up from 352. The health minister said 195 people remained in hospital, 41 in intensive care and three in critical condition.
French authorities declared a state of emergency after the attacks, and security forces have conducted 414 raids, making 60 arrests and seizing 75 weapons, including 11 military-style firearms, the Interior Ministry said.
Parliament is expected to vote by the end of the week to extend the state of emergency for three months.