The blast at around 2:00 am (0100 GMT) came as French police special forces besieged the first floor flat in the southern city of Toulouse where Mohamed Merah, a 23-year-old armed extremist, is holed up.
A source close to the operation earlier denied rumours that three earlier blasts had signalled a renewed assault on the apartment, which police attempted to raid earlier in the day, before retreating with two wounded officers.
But an official said: "He said he wanted to give himself up. He changed his mind, so we're stepping up the pressure on him to surrender."
There was no indication of an exchange of fire following the blasts. Merah is thought to be armed with a Kalashnikov assault rifle, a Mini-Uzi submachine pistol and a collection of handguns.
According to prosecutors, after repelling a pre-dawn raid on Wednesday, he entered into talks with a police negotiator and claimed responsibility for a series of deadly gun attacks, claiming to be an al Qaeda-trained militant.
France's top anti-terror prosecutor Francois Molins said Merah had claimed responsibility for three shootings over the previous 10 days in which three French paratroopers, three Jewish children and a teacher were killed in cold blood, shocking the nation.
He claimed to be avenging Palestinian deaths and opposing the French military's involvement in Afghanistan and France's ban on full-face veils.
Molins said the suspect had shot and wounded two elite officers after police first raided the apartment building.
"Mohamed Merah explained that he belonged to al Qaeda. He explained he had been trained by al Qaeda in the Pakistani-Afghanistan region in Waziristan," Molins told reporters in Toulouse, scene of two of the shootings.
Waziristan is a tribal area straddling the Afghan-Pakistani border which is known as a haven for insurgents -- including al Qaeda militants -- connected to Taliban guerrillas fighting in both countries.
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@god: People like @pakistan politics and @zeta are helping the world to open their eyes wide to see the kind of terrorists Pakistan breeds. The world might not bring down Pakistan but with the help of these two, it will be done. I personnaly thank them.
Trained in Pakistan....., of course that was expected. I guess he was classmate of Ajmal Kasab who attacked India.
Exceptional student from Pakistans terror university making its Alma Mater proud! Maybe the country should award him a Nishan e Haider!
yeah, again pakistan shining,. hub of world terrorism. no wonder, full of people with mentality like pakistan politics, zeta, pakistan will continue shining.