Gunman claims al-Qaida link in hold-up

Police said the man, who had claimed to have links with al-Qaida, was slightly injured in the operation to capture him.

The announcement came soon after gunshots were heard from the area of the bank.

Authorities say the gunman had suffered psychiatric problems and claimed he was acting for religious reasons.

The hostages, the bank manager and three staff, were held inside the bank after the man entered at about 11am and fired a shot.

The incident, which saw neighbouring buildings and a school evacuated, plunged the city into fear for the second time in recent months. Tensions have been high in Toulouse since March, when a gunman who police said claimed links to al-Qaida killed three Jewish schoolchildren, a rabbi and three paratroopers in a series of targeted attacks.

They were France’s worst terrorist attacks in years, and led to a crackdown on suspected Islamist radicals around France.

Following negotiations with police the bank gunman had released one hostage mid-afternoon, a woman in her late 20s who was feeling ill.

Toulouse Mayor Pierre Cohen said the man had been known to authorities for having psychiatric problems.

French Prosecutor Michel Valet said he had said he wanted to advertise the religious motivation behind his act.

The bank is in the same neighbourhood where Mohamed Merah, the man believed responsible for the March attacks, was shot and killed by police after a 32-hour standoff.

Merah, an Islamic radical who had trained in Afghanistan and Pakistan. was shot in the head during a gunfight when he leapt from a window firing at officers as police entered his apartment.

While there was no sign the latest gunman had links to terrorism, it came amid heightened concerns in France about homegrown radicals following the Merah affair.

Pakistan had earlier announced it had arrested a Frenchman reportedly linked to one of the masterminds of the September 11 terrorist attack.