French authorities released two of the seven suspects arrested in police raids at the weekend which broke up a terror ring plotting an attack, a judicial source told AFP.

Police swooped on Saturday night in the in the eastern city of Strasbourg and Marseille in the south following an investigation by security services lasting more than eight months.

They detained seven alleged plotters from France, Morocco and Afghanistan, foiling what Interior Minister Bernard Cazeneuve called "a long-planned terror attack on our soil."

Two of those held in Marseille were freed on Tuesday. They were suspected of having helped shelter a Moroccan identified as Hicham E., who is still in custody, thought to be the group's financer.

France is under a state of emergency that gives security forces enhanced powers to mount surveillance and launch raids, a year after the attacks by Islamic State jihadists on Paris that left 130 people dead.

The mayor of Strasbourg has said the interior ministry indicated the targets were in the Paris region rather than in his city, which will open a major Christmas market this Friday.

France has suffered three major attacks since January 2015 when gunmen targeted the Charlie Hebdo satirical magazine and a Jewish supermarket, followed by last November's atrocities in Paris.

In July, a self-radicalised extremist drove a truck through crowds watching fireworks in the southern city of Nice, killing 86.

The four suspects held in Strasbourg, all French, aged between 35 and 37 and not previously known to the intelligence services, were still being questioned Tuesday.

Two of them are suspected of travelling to Syria in 2015 before returning to Europe.

Two handguns, an automatic pistol, a machine pistol and jihadist propaganda were all found during the raids.

Two Frenchmen linked to the group who are thought to have been in communication with a commander in Syria have been questioned and put behind bars, a probe source said.