The suspected murderer of four Jews at a school in Toulouse and three French paratroopers has been confirmed dead in gunfire with police.

French police raided a building that Mohammed Merah had been holed up in since 3am on Wednesday morning. Not having heard anything from Merah overnight, despite a series of explosions aimed at pressuring him to surrender, they threw stun grenades into the apartment at about 10.30am.

There was no response and when police entered initially there was no sign of Merah, but he emerged from another room armed with a submachine gun. After shooting at police he jumped out of a window, still shooting, and was found dead on the ground below.

According to Interior Minister Claude Gueant, two officers were wounded during the exchange of fire.

Police and government ministers had said they wanted to take the suspect alive, but after 32 hours it is understood they felt it was necessary to break the stand-off and minimise risk to police officers.

Merah had reportedly told officers that he wanted to "die with weapons in his hands"

The 23-year-old had already been named as the gunman behind the attack on the Ozar Hatorah school in Toulouse and two other attacks that left three paratroopers dead.

He had claimed to have al-Qaida links. He also told French police that his motives were revenge for the Palestinians and the presence of French troops in foreign wars.

He had French citizenship but was of Algerian descent.