Photo: Contributed

UPDATE 1:35 p.m.

A top French official says a man has been killed in a shootout with police in Strasbourg, but he has not been confirmed as the suspected gunman who killed three people near a Christmas market.

The official, who could not be named because the operation was ongoing, said the dead man opened fire on police Thursday night and officers fired back, killing him.

A local police official, who also spoke on condition of anonymity for the same reason, said the man who opened fire was armed with a pistol and a knife.

The shooting occurred in the Neudorf neighbourhood of Strasbourg, where police searched intensively earlier Thursday for Cherif Chekatt, a 29-year-old suspected of being the Christmas market gunman.

Chekatt is accused of killing three people and wounded 13 on Tuesday night. More than 700 officers were deployed to find Chekatt, who had a long criminal record and had been flagged for extremism, government spokesman Benjamin Griveaux told CNews television.

Asked about the instructions they received, Griveaux said the focus was catching Chekatt "as soon as possible," dead or alive, and to "put an end to the manhunt."

Security forces, including the elite Raid squad, spent two hours searching in Neudorf on Thursday based on "supposition only" that Chekatt could have been hiding in a building nearby two days after the attack, a French police official said. Chekatt grew up in Neudorf.

ORIGINAL 5:46 a.m.

French security forces were trying to catch the suspected Strasbourg gunman dead or alive, an official said Thursday, two days after an attack near the city's Christmas market.

Local authorities, meanwhile, increased the death toll to three. The attack wounded 13 others, including five in serious condition, the prefecture of the Strasbourg region said.

More than 700 officers were involved in the manhunt for 29-year-old Cherif Chekatt, who had been flagged for extremism, government spokesman Benjamin Griveaux told CNews television.

Prosecutors have opened a terror investigation into Tuesday's attack.

Police have distributed a photo of Chekatt, who was wounded in an exchange of fire with security forces, with the warning: "Individual dangerous, above all do not intervene."

The government raised the terror alert level nationwide and deployed 1,800 additional soldiers across France to help patrol streets and secure crowded events.