National police spokesman Jerome Bonet, also speaking on BFM television, said there were thousands of people on Paris' iconic boulevard when the gunman opened fire and that the rapid response of officers who shot and killed him avoided possible "carnage".
The attack came three days before the first round of balloting in France's tense presidential election. We are at war.
The shooting happened at about 9 p.m. local time Thursday, just as the City of Lights was coming to life for the night.
The shooter opened fire with an automatic weapon on a police vehicle on the world-famous boulevard at around 9:00 pm (1900 GMT), prompting tourists and visitors to run for their lives. Hollande held an emergency meeting with the prime minister Thursday night and planned to convene the defense council Friday morning.
The attack appeared to fit in a spreading pattern of French extremists targeting security forces and symbols of the state, to discredit, take vengeance and destabilize.
"Immediately a man got out and fired on the police vehicle, mortally wounding a police officer". "Other policemen engaged and shot and killed the attacker", Brandet said.
The Islamic State group, which is being driven out of its areas of territorial control in Iraq and Syria by Western-backed coalitions and has hundreds of French-speaking fighters, claimed responsibility for Thursday's shooting via its Amaq news agency, naming the attacker as Abu Yousif al-Belgiki.
Steve White, chairman of the Police Federation of England and Wales, said: "Once again the police family is in mourning and it serves to underline how courageous officers are putting their life on the line day in and day out to protect the public".
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A Paris prosecutor said the gunman has been identified, but they are still assessing whether he had accomplices. Also wounded was a female tourist.
Macron said he canceled campaign stops out of a sense of "decency" and to allow police to concentrate their resources on the attack investigation.
Witness Chelloug, a kitchen assistant, told Reuters he was walking out of a shop and saw a man get out of a vehicle and open fire with a rifle on a policeman. He was convicted in that attack and had a criminal record because of involvement in violent robberies. Earlier this week, two men were arrested in Marseille for planning an attack ahead of the election.
Speaking in Indonesia Friday, US Vice President Mike Pence said the attack was just the latest reminder "that terrorism can strike anywhere at any time".
As the first details filtered through, US President Donald Trump sent his condolences and said that "it looks like another terrorist attack". What can you say. "It never ends", the President said. Cazeneuve, the Socialist prime minister, accused the National Front leader of seeking to make political hay from the assault.
"He wants to lead Muslims away from fundamentalism to security", she said. In a statement, the United Kingdom government said it "strongly condemns the appalling terrorist attack in Paris".
France has lived under a state of emergency declared following a terrorist attack in November 2015 that left 130 dead. Parliament voted in December to extend the extraordinary provisions to ensure the protection of upcoming presidential and general elections.