Belgian police launched a “jihadist-related” anti-terrorism operation in the eastern town of Verviers on Thursday, with reports saying there were three deaths.
Public broadcaster RTBF reported three deaths and said explosions were heard at the scene, but there was no immediate confirmation.
The incident comes as Europe is on high alert after 17 people were killed in the Islamist attacks on the Charlie Hebdo magazine and a Jewish supermarket in Paris last week.
“An operation is under way,” a source in the mayor’s office told AFP without giving further details.
Another official said separately that the incident in Verviers, which is close to the German border some 125 kilometres (70 miles) from Brussels, was “jihadist-related”.
Belgian media reported that no police were injured in the incident.
Residents reported gunfire and blasts in Verviers.
“I heard a sort of explosion, followed by several gunshots,” one local told RTBF. “For the moment, I cannot tell you any more because I don’t dare go out to see what is happening.”
Another local resident said “machineguns were firing for about 10 minutes.”
Belgian investigators said earlier Thursday they are probing whether an arms dealer sold weapons used in the Paris attacks, after confirming supermarket gunman Amedy Coulibaly sold the man a car belonging to his partner Hayat Boumeddiene.
There was no immediate confirmation of any link between the Coulibaly investigation and Thursday’s raid.
The man, Neetin Farasula, from the airport city of Charleroi in French-speaking southern Belgium, is in detention on suspicion of a possible link to the weapons used in the Paris attacks.
Belgian prosecutors are working with French authorities to establish any “possible link” to last week’s attacks at the offices of the Charlie Hebdo satirical magazine and a Jewish supermarket in Paris.
Coulibaly, who was killed by police on Friday, is also believed to have shot dead a policewoman in another Paris attack.
Prosecutor spokesman Eric Van der Sijpt said that the Belgian suspect “bought the car belonging to Coulibaly’s wife.”
Spain meanwhile opened an investigation Thursday into Coulibaly and Boumeddiene’s visit to Madrid shortly before the attacks.
Karasular handed himself into police on Tuesday, saying that he had been in contact with Coulibaly in recent months and had tried to “swindle” the Frenchman over the car deal, but was scared after the Paris attacks.
Turkish authorities say Boumeddiene crossed into Syria on January 8 from Turkey. She had arrived in Istanbul on a flight from Madrid before the Paris attacks took place.