Two assailants slit the throat of an 84-year-old priest at a church in northern France on Tuesday in a hostage-taking drama that has shocked the country.
The attack in the Normandy town of Saint-Etienne-du-Rouvray came as France was still reeling from a massacre in the French Riviera city of Nice claimed by the Islamic State group.
The motivations for the hostage-taking were not yet clear, but the Paris prosecutor's office said the case was being handled by anti-terrorism prosecutors.
Five people were inside the church when it came under attack, interior ministry spokesman Pierre Henry Brandet said.
He said the church was surrounded by France's anti-gang brigade the BRI, which specialises in kidnappings, and that "the two assailants came out and were killed by police".
The priest died after having his throat slit, sources close to the investigation told AFP. The archbishop of the nearby city of Rouen, Dominique Lebrun, named him as 84-year-old Jacques Hamel.
Three of the hostages were freed unharmed, and another was fighting for their life, said Brandet.
Pope Francis voiced his "pain and horror" at the "barbaric killing" of the priest.
France remains on high alert nearly two weeks after Tunisian Mohamed Lahouaiej Bouhlel ploughed a truck into a crowd of people celebrating Bastille Day in Nice, killing 84 people and injuring over 300.
President Francois Hollande, who is from Rouen, and Interior Minister Bernard Cazeneuve were on their way to the scene, their offices said.
An AFP journalist said the scene of the attack was crawling with emergency vehicles and police.
French Prime Minister Manuel Valls expressed his horror at what he called "a barbaric attack on a church".
"The whole of France and all Catholics are wounded. We will stand together," he wrote on Twitter.
Lebrun urged all non-believers to join those of the church in "calling to God".
"The Catholic Church can take up no other weapons that prayer and fraternity between men," he said in a statement.
The Nice attack was the third major strike on France in 18 months and was claimed by the Islamic State group.
Two attacks in Germany claimed by the IS militants since then have also increased jitters in Europe.
After Nice, France extended a state of emergency giving police extra powers to carry out searches and place people under house arrest for another six months until January.
It was the fourth time the security measures have been extended since IS jihadists struck Paris in November, killing 130 people in a wave of bombings and shootings at restaurants, a concert hall and the national stadium.
Valls had warned earlier this week that the country will face more attacks as it struggles to handle extremists returning from jihad in the Middle East and those radicalised at home by devouring propaganda on the internet.
France has been concerned about the threat against churches ever since Sid Ahmed Ghlam, a 24-year-old Algerian IT student, was arrested in Paris in April last year on suspicion of killing a woman who was found shot dead in the passenger seat of her car, and of planning an attack on a church.
Prosecutors say they found documents about Al-Qaeda and IS at his home, and that he had been in touch with a suspected militant in Syria about an attack on a church.
As part of beefed up security operations in France, some 700 schools and Jewish synagogues and 1,000 mosques are under military protection.
However with some 45,000 Catholic churches, and thousands more Protestant and evangelical churches, protecting all places of worship is a massive headache for security services.
The Nice massacre triggered a bitter political spat over alleged security failings, with the government accused of not doing enough to protect the population.