TOULOUSE/PARIS, France, March 22 (Reuters) - French police tried to flush out a 24-year-old gunman suspected of killing seven people in the name of al Qaeda, with explosions and gunfire heard outside his apartment on the second day of a siege in the southern French city of Toulouse.
In a drama gripping France five weeks before a presidential election, some 300 police have laid siege since Wednesday to the five-storey house in a suburb of the prosperous industrial town in a bid to capture the shooter, Mohamed Merah.
The French citizen of Algerian origin told negotiators he had killed three soldiers last week and four people at a Jewish school in Toulouse on Monday to avenge the deaths of Palestinian children and because of French army involvement in Afghanistan.
France's elite RAID commando unit detonated three explosions just before midnight on Wednesday, flattening the main door of the building and blowing a hole in the wall, after it became clear Merah did not mean to keep a promise to turn himself in.
"These were moves to intimidate the gunman who seems to have changed his mind and does not want to surrender," ministry spokesman Pierre-Henry Brandet told Reuters.
Another explosion and several gunshots were heard in the early hours of Thursday morning.
Merah, who authorities say has a weapons cache in the apartment including an Uzi and a Kalashnikov assault rifle, wounded two officers when in the early morning raid.
"What we want is to capture him alive, so that we can bring him to justice, know his motivations and hopefully find out who were his accomplices, if there were any," Defence Minister Gerard Longuet said on TF1 television.
Thomas Withington at London's Centre for Defence Studies said police might wait until just before dawn before launching an assault after throwing a stun grenade into the house.
"What complicates things is that they want to take him alive. They want to wait until he gets very tired," he said.
Merah, who has told police negotiators he had accepted a mission from al Qaeda after receiving training in the lawless border area of Pakistan, had already identified another soldier and two police officers he wished to kill, investigators said.
"He has no regrets, except not having more time to kill more people and he boasts that he has brought France to its knees," Paris Prosecutor Francois Molins, part of the anti-terrorist unit leading the investigation, told a news conference.
The gunman negotiated with police all Wednesday, promising to give himself up and saying that he did not want to die.
"He's explained that he's not suicidal, he doesn't have the soul of a martyr and he prefers to kill but to stay alive himself," the prosecutor said.
CALL FOR UNITY
At a ceremony in an army barracks in Montauban, near Toulouse, President Nicolas Sarkozy paid tribute on Wednesday to the three soldiers of North African origin killed last week.
"This man wanted to bring the Republic to its knees. The Republic did not give in, the Republic did not back down," he said, standing before three coffins draped in the French flag.
Sarkozy's call for unity came after far-right leader Marine Le Pen, a rival presidential candidate, said France should pursue war on Islamic fundamentalism.
But leaders of the Jewish and Muslim communities said the gunman was a lone extremist and also called for calm and unity.
Sarkozy's handling of the crisis could be a decisive factor in determining how the French people vote in the two-round presidential elections in April and May.
Immigration and Islam have been major campaign themes after Sarkozy tried to win over supporters of Le Pen, who accused the government of underestimating the threat from fundamentalism.
France's military presence in Afghanistan has divided the two main candidates in the election. Opposition Socialist party leader Francois Hollande, who leads Sarkozy in polls for the crucial May 6 runoff vote, has said he will pull troops out by the end of this year while Sarkozy aims for the end of 2013.
The raid came just three days after the school attack and followed an unprecedented manhunt by French security forces.
Merah's lawyer Christian Etelin, who has defended him in several minor crimes, said that his client had a tendency towards violence that had worsened after a stay in prison and trips to Afghanistan and Pakistan.
"There was his religious engagement, an increasing hatred against the values of a democratic society and a desire to impose what he believes is truth," Etelin told France 2 television. (Additional reporting by Jean Decotte and Nick Vinocur in Toulouse; Daniel Flynn, Geert De Clercq and Leigh Thomas in Paris; Writing by Geert De Clercq; Editing by Louise Ireland)