A car deliberately hit a police van before bursting into flames in the Champs Élysées area of central Paris, police officials say.
The driver died in the incident. Police found a Kalashnikov rifle, handguns and gas bottles in the car.
Police say the situation is now under control, and neither law enforcement officers nor civilians were injured.
France is under a state of emergency after being hit by a wave of deadly terror attacks in recent years.
A policeman was shot dead and two others were wounded in an attack on the Champs Élysées in April, just days before the first round of the presidential election.
The latest incident comes a day after the end of parliamentary elections in France, which saw President Emmanuel Macron’s party win a landslide majority.
A white car could be seen standing in the middle of the empty avenue with one door open and sniffer dogs were sent in, the BBC’s Hugh Schofield reports from Paris.
Our correspondent says there are always many police and gendarme vehicles near the spot, as it is next to the local police station.
Reports say officers had to smash the windows of the car – a Renault Mégane – to pull the driver out.
The man was known to intelligence services, the BFMTV news channel reports.
Police earlier warned people to respect a security cordon around the area.
The anti-terrorist section of the prosecutor’s office has opened up an investigation into the incident, which happened close to the Élysée presidential palace and the US embassy.