What we know:
- One policeman was killed in the attack, two others injured
- IS has claimed responsibility for the attack
- It occurred at the Champs Elysees shopping boulevard
- Politicians have suspended campaigning ahead of Sunday's election
- Police operation underway in Paris' eastern suburbs
French President Francois Hollande said he was convinced the "cowardly killing" on the Champs Elysees boulevard, in which the assailant was himself shot dead by police, was an act of terrorism.
The wide avenue that leads away from the Arc de Triomphe had been crowded with Parisians and tourists enjoying a spring evening, but police quickly cleared the area, which remained empty well into the night of all but heavily armed security forces and police vehicles.
France's interior ministry said the gunman was killed after opening fire on the officers at around 9:00 pm (1900 GMT) on the boulevard.
The IS group claimed responsibility for the fatal shooting in a statement by the jihadists' propaganda agency Amaq.
A police source told AFP: "The attacker arrived by car and got out. He opened fire on a police car with an automatic weapon, killing one of the police officers and trying to attack others while running."
A police union Twitter account tweeted the police officer was shot while in a car stopped at a red light.
A police arrest warrant issued earlier on Thursday, which was seen by Reuters after the attack, warned of a dangerous individual who had come into France by train from Belgium on Thursday. It was unclear if that man was the attacker or linked to the shooting.
Police have searched a home in a suburb east of Paris believed linked to the attack.
A police document obtained by The Associated Press identifies the address searched in the town of Chelles as the family home of a 39-year- old with a police record.
The bustling shopping street in the heart of the city was blocked by armed officers and nearby metro stations closed.
"We had to hide our customers in the basement," Choukri Chouanine, manager of a restaurant near the site of the shooting, told AFP, saying there was "lots of gunfire."
Dozens of vehicles from the emergency services were sent to the area, where a helicopter was also deployed.
Sources close to the investigation told AFP the shooter was being investigated over his possible intention to kill police officers.
The incident came as French voters prepared go to the polls in the most tightly-contested presidential election in living memory.
French conservative politician Francois Fillon and National Front leader Marine Le Pen, both candidates in the presidential race, said that campaigning would be suspended following the shooting.
A first round of voting is scheduled to be held on Sunday in the election followed by a runoff vote on May 7 between the two leading candidates.
As the first details filtered through about the attack, US President Donald Trump sent his condolences and said that "it looks like another terrorist attack. What can you say? It just never ends."
The shooting comes two days after the arrest of two men in southern Marseille with weapons and explosives who were suspected of preparing an attack to disrupt the first-round of the presidential election on Sunday.
Eyewitnesses told SBS Europe correspondent Brett Mason that a second attacker was at the scene.
Turnbull offers condolences
Malcolm Turnbull says Australia's prayers are with the family of a police officer shot dead on Paris' Champs Elysees.
The prime minister said the shooting - which left one dead and two wounded - had all of the hallmarks of a terror attack.
"But at this stage I'm advised that the French prosecutor is on the scene and they'll obviously be making further announcements as they investigate the crime," he told the Seven Network on Friday.
Political rivals highlight terror threat
France is in a state of emergency and at its highest possible level of alert since a string of terror attacks that began in 2015, which have killed over 230 people.
Up until now, polls showed voters more concerned about unemployment and their spending power than terrorism or security, though analysts warned this would change in the event of further bloodshed.
Far-right leader Marine Le Pen welcomed security moving to the heart of the campaign on Thursday as she took part in a prime-time interview show alongside the 10 other presidential candidates.
"We are suffering the consequences of a laxity that has continued for years," she said shortly before the shooting, promising to take a hard line against extremists and anyone suspected of being an Islamist.
For weeks, centrist former banker Emmanuel Macron and the National Front's (FN) Le Pen have been out in front but opinion polls now show there is a chance that any of four leading candidates could reach the second-round runoff on May 7.
Though Le Pen and Macron are the frontrunners, scandal-plagued conservative Francois Fillon and far-left firebrand Jean-Luc Melenchon have closed the gap substantially in the last two weeks.
"The first responsibility of the president is to protect," Macron said on the interview show. "This threat will be part of our daily lives in the next years."
Plethora of attacks
Major attacks in France targeted the Charlie Hebdo magazine in January 2015, sites around Paris including the Bataclan concert hall in November the same year and families at a fireworks display in Nice in July last year.
In between, there have been a series of smaller attacks, often targeting security forces.
Thousands of troops and armed police have been deployed to guard tourist hotspots such as the Champs Elysees or other potential targets including government buildings and religious sites.
In February, a man armed with a machete in each hand attacked soldiers on patrol at Paris's Louvre Museum. The attacker, a 29-year-old Egyptian, was seriously injured.
And in March, a 39-year-old man was killed at Paris's Orly airport after attacking a soldier.
