French authorities have confirmed they are dealing with a “security incident” at the world-famous Champs-Élysées.
Paris police on Monday said they are “in control” after armed police stormed the shopping district in the city centre.
Witnesses say a police van was hit by another vehicle which was the on fire.
Others claim to have heard gunshots.
A French official said the driver of the car, who may have been armed, is likely to be dead after police descended on the scene.
A police bomb squad is also present.
One witness, who was just 20 metres from the scene, said: “Large bangs followed by what sounded like shots fired near a car with smoke coming out of it on Champs Elysees.”
Armed officers have been pictured surrounding a police cordon after reports of a man on the ground.
Some reports suggest he was dragged from the car.
Police in Paris have confirmed the ongoing incident and are asking people to stay clear of the area.
Nearby, the theatre Marigny was evacuated, local reports suggest.
The Champs-Elysées-Clémenceau metro station was also closed.
France has been in a state of emergency since the Bataclan terror attacks in November 2015, in which 130 people were killed by ISIS supporters.
During the last French elections a police officer was shot on the Champs-Élysées.
Earlier in June an Algerian Islamist attacked a police officer with a hammer in front of Notre-Dame de Paris.