A gunman is holding hostages in a supermarket in southwestern France after a police officer was shot and wounded nearby. Local media reports the gunman yelled “Allahu akbar!” and swore allegiance to the Islamic State.

Local media is reporting one dead in the incident. Ladepeche reported the man shot and killed is the supermarket's butcher.

Counter-terrorism prosecutors said they are treating the incident as terror.

"I can confirm to you that the anti-terrorism division of the Paris prosecutors has taken up the case,'' the source told Reuters.

The situation on Friday is unfolding at Super U, a chain supermarket in Trebes, a small town in southwestern France. 

Ladepeche reported a group of CRS police officers were jogging when a car started following them and then opened fire on the group, shooting at least five times. One of the officers was reportedly shot in the shoulder.

The French Interior Ministry said on its Twitter account Friday that police and rescue operations are the priority. Authorities in the Aude region are warning people to avoid the area around the supermarket. 

"This is a serious situation," said Prime Minister Edouard Philippe.