A massive manhunt is under way after three hooded Islamist terrorists shot dead 12 people, including two policemen, and critically wounded four others at a satirical magazine in Paris.

Further outrages are feared unless the killers who stormed into the newsroom of Charlie Hebdo with AK-47 assault rifles, killing its editor, cartoonists and other staff, are caught.

The publication had been at the centre of controversy over cartoons it published which ridiculed the Prophet Muhammad.

As armed police scrambled to lock down central Paris, special forces were raiding properties in the city of Reims, where one of the suspects, identified in reports as18-year-old Hamyd Mourad had lived.

French-born brothers, Said and Cherif Kouachi, aged 32 and 34, who lived in Paris, are also suspected. There were reports one of the brothers had been jailed for involvement in Jihadism in Iraq.

Last night, 5,000 people defied the terrorists by holding candlelit vigils in Paris's main Place de la République square in support of the right to freedom of speech. Thousands more flooded onto the streets of Marseille, Lyon and Clermont-Ferrand in solidarity.

In London's Trafalgar Square, the French national anthem was sung and there were similar scenes at the Brandenburg Gate in Berlin.

Those gathered held up mobile phones bearing the words 'Je Suis Charlie' [I am Charlie] which has been trending on the social media site Twitter, while one sign in Paris said: "Not Afraid."

French President Francois Hollande, who announced a national day of mourning today (thur), declared: "France is in shock."

Mr Hollande described the atrocity as "an act of exceptional barbarity" and that people had been "murdered in a cowardly manner". Mr Hollande told reporters at the scene: "We are threatened because we are a country of liberty." He later went on television to call for national unity.

Bernard Cazeneuve, the French Interior Minister, insisted all government means had been mobilised to "neutralise the three criminals who have committed this barbaric act".

The terrorists struck around 11.30am as the staff at Charlie Hebdo gathered for a daily editorial meeting.

Masked and hooded men dressed in black entered the premises and opened fire with assault rifles. Reports suggested as many as 50 shots were fired.

The terrorists exchanged fire with police in the street. Video footage showed one of the attackers approaching a wounded officer as he lay on the ground. The gunman then shot him in the head.

Witnesses described how they heard the terrorists shouting: "We have avenged the Prophet Mohammed" and "Allahu Akbar"; Arabic for God is Great.

The gunmen escaped by car, which they later abandoned in a street in northern Paris. They then hijacked a second vehicle.

A police spokesman said they appeared to have opened fire on everyone. "It was carnage, absolute butchery," he declared.

France has been on alert for militant Islamist attacks after several incidents before Christmas, including when cars were driven into shoppers in Nantes and Dijon. The French authorities denied the attacks were linked but raised the security level in Paris to its highest. Hundreds of soldiers were deployed onto the streets.

The attack on Charlie Hebdo comes amid rising tension in France about immigration and the influence of Islam on society. Earlier this week, there were demonstrations across Germany against what protesters claim is the Islamisation of the West.

In 2011, the magazine angered some Muslims after publishing cartoons of the Prophet Mohammed; a day later its offices were firebombed. One of yesterday's victims, editor Stephane Charbonnier, 47, had received death threats in the past and was living under police protection. His colleagues Jean Cabut, 76, Georges Wolonski, 80, and Bernard Verhac, 57, and deputy editor Bernard Maris, 68, also died.

The magazine's last tweet around the time of the shooting showed a cartoon image of the Islamic State leader Abu Bakr al-Baghdadi. The Islamic State terror group has previously warned it intended to strike against France.

Yesterday's attack is believed to be the deadliest in France since 1961 when right-wing extremists who wanted to keep Algeria French bombed a train, killing 28 people.

Among the 12 dead were several cartoonists but one who survived, Corinne "Coco" Rey, described the terror, saying the shooting lasted five minutes. "I sheltered under a desk...They spoke perfect French(and)claimed to be from al Qaeda."

Wandrille Lanos, a TV reporter who works across the road from Charlie Hebdo, was one of the first people to enter the magazine's premises after the attack. He said: "We saw the number of casualties was very high. There were a lot of people dead on the floor and there was blood everywhere."

Another witness saw paramedics trying to save an injured policeman in the road. "It was ghastly, awful. We knew it was serious because they weren't even trying to take him away to hospital. They were just trying to save him right there in the street. We are all in shock."

World leaders united to condemn the atrocity.

Barack Obama, the US President, condemned the "horrific shooting", offering to provide any assistance needed "to help bring these terrorists to justice".

Ban Ki-Moon, the UN Secretary General, described the attack as an "horrendous, unjustifiable and cold-blooded crime".

David Cameron branded it "sickening" and told MPs: "We stand with the French people in the fight against terror and defending the freedom of the press."

Angela Merkel, the German Chancellor, in Downing Street for talks with the Prime Minister, denounced the "abominable act."

No 10 made clear Britain would offer any intelligence help it could.Today, Theresa May, the Home Secretary, will chair a meeting of Cobra, the emergency contingencies committee,.

First Minister Nicola Sturgeon condemned the "horrific and appalling crime." Salman Rushdie said "we all must to defend the art of satire".