Paris prosecutor Francois Molins said telephone surveillance and witness statements had led police to believe that Belgian jihadist Abdelhamid Abaaoud was in an apartment in Saint-Denis in northern Paris.
Anti-terrorist police flooded the streets near the building and soldiers were also drafted in for an operation that lasted around seven hours.
The prosecutor said at the end of the operation that investigations following Friday's attacks allowed police "to obtain telephonic surveillance and witness testimony which led us to believe that Abaaoud was likely to be in an... Apartment in Saint-Denis".
"It is impossible to give the identities" of the two suspected jihadists killed in the assault, he said. The dead included a woman who detonated explosives and blew herself up.
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Police launched their assault before dawn in the area close to the Stade de France stadium where three suicide bombers blew themselves up on Friday night, killing one person.
Other gunmen wearing explosives belts had attacked a concert hall, bars and restaurants in a trendy eastern district of Paris, killing 129 people.
He has been photographed in Syria and was believed to have been in contact with a suspect on the run after the Paris attacks, Salah Abdeslam.