Elite police units are trying to establish dialogue with two suspects in the Charlie Hebdo massacre holed up in a small business outside Paris with a hostage, an interior ministry spokesman said Friday.

The three-day manhunt for the terrorists behind the Charlie Hebdo murders in Paris appeared to have reached its endgame at a small printing works near Paris Charles de Gaulle airport.

The suspects, believed to be French-Algerian brothers Said and Cherif Kouachi, had abandoned a hijacked Renault Clio on Thursday and fled on foot into the woodland, which covers an area the size of Paris.

In appalling weather, reinforcements continued arriving from Paris as hundreds of officers flooded the area.

Meanwhile three police helicopters tried to search through the gloom for any sight of the suspects on the ground. Elsewhere, police were questioning a sister of the Kouachi brothers as well as their wives for any information that might help locate them.

Roads were closed off to the public and armed police ordered journalists to turn back if they got too close to the search area, warning them it was too dangerous for them to be there.

At around 8.20am GMT, there were reports that the terrorists had hijacked a Peugeot 206 - the third car used by them - in Montagny Sainte Felicite, 30 miles from Paris.

They reportedly exchanged fire with police in Seine-et-Marne near Dammartin-en-Goele. The gunfight was followed by a car chase down the N2 towards Paris.

According to some reports, they seized a hostage at the time they hijacked the car, though not, apparently, its female driver, who identified the two men to police.Conflicting reports suggested two people had been either killed or injured in the gunfight.

By 8.45, France's interior minister, Bernard Cazeneuve, felt confident enough to say: "We have indications that the terrorists are within our perimeter. The national police and the gendarmerie are working to locate them. An operation is underway."

With hostage negotiators making contact with the terrorists by phone and police massing outside the building, a salesman who was inside the printworks when the terrorists arrived described inadvertently shaking hands with one of the gunmen, who pretended to be a policeman.

The man, called Didier, told France Inter radio: "When I arrived my client came out with an armed man who said he was from the police. My client told me to leave so I left."

Naming his client as "Michel", he added: "I was in front of the door. I shook Michel's hand and I shook the hand of one of the terrorists."

The black-clad gunman, wearing a bulletproof vest and carrying a Kalashnikov, told him: "

He said the black-clad man who was wearing a bullet-proof vest and carrying what looked like a Kalashnikov rifle told him: "Leave, we don't kill civilians anyhow."

Didier said: "That really struck me, so I decided to call the police. I guess it was one of the terrorists. It could have been a policeman if he hadn't told me 'we don't kill civilians'. They were heavily armed like elite police."

He said Michel had closed the door behind him. He is now presumed to be a hostage. The gunmen are reported to have told police they want to "die like martyrs".

Around 1,000 children were evacuated from two primary and two secondary schools nearby. Some were heard shouting "Charlie! Charlie!"

Just before 12.30, there were reports of a shootout at a kosher grocery shop in Porte de Vincennes, eastern Paris, with one person reported wounded. The gunman, who is thought to be the same man who shot dead policewoman Clarissa Jean-Philippe on Thursday, reportedly took a hostage.