An armed teenager was on Tuesday holding four women hostage at a bar near the southern French city of Toulouse, prosecutors and a police source told AFP. 

But officials said there was no suspicion of any terror-related motive. 

"The suspect is 17-years-old and he is holding the bar owner and her employees hostage," the source said of the incident in Blagnac, a suburb of Toulouse. 

"He has fired in the air twice since taking them hostage," another source said, saying the suspect had threatened to open fire if the police intervened. 

But the mayor's office in Blagnac said there was "no suspicion of a terrorist motive" in the incident, which began around 4:20 pm (1420 GMT).

So far, the suspect had made no demands, police said, indicating they had set up a security perimeter around the bar, a popular establishment where people often go to bet on horses. 

Around a dozen police vans could be seen in the area alongside two first responder vehicles, an AFP correspondent said.

Jean-Baptiste Boutie, who works at the travel agency opposite the bar, heard shots and went outside but a police officer told him: "Go back inside because there is a hostage situation," he told AFP.

The town hall said the bar had been run for the past 40 years by the same owner.