Three loud explosions were heard outside an apartment in southern France where a gunman suspected of seven racially motivated killings is under siege, a Reuters witness said.

The blasts were much bigger than periodic small explosions that police have been setting off around the five-storey building since the early hours of Wednesday in an attempt to tire out Mohamed Merah and capture him alive.

Merah, aged 23, has confessed to killing three soldiers, three Jewish schoolchildren and a rabbi to avenge the deaths of Palestinian children and because of French army involvement in Afghanistan, but has yet to give himself up.

Police lost contact with Merah on Wednesday evening and Interior Minister Claude Gueant said on Thursday he hoped the suspect was still alive after two shots were heard in his apartment.

A police trade union source said the blasts were from flash grenades fired to check for signs of life in the ground floor flat.

(Reporting by John Irish; Writing by Catherine Bremer; Editing by Paul Taylor)