A French soldier has been killed in Somalia during a failed operation to free a hostage who is also believed to have died, the defence minister said, reports the BBC.
Jean-Yves Le Drian told reporters in Paris that a second soldier was missing after the operation.
A battle erupted with al-Shabab militants after commandos swooped on the town of Bulo Marer overnight.
The raid came hours after French troops intervened in the west African state of Mali.
France was "engaged in a merciless fight against terrorism wherever it is found", Mr Le Drian said.
It seems likely that the operation was linked to the intervention in Mali, the BBC's Hugh Schofield reports from Paris.
The French government knew well the intervention would have dangerous implications for the nine French hostages being held across northern Africa, our correspondent says.
Mr Le Drian said "all the indications" were that hostage Denis Allex, kidnapped in Somalia in July 2009, had been killed by his captors during the operation.
But al-Shabab said Mr Allex, an agent of France's DGSE intelligence service, was not in the area and was unharmed.
Read more of this report from the BBC.