France, March 28 -- The incident occurred around 3:30 am in front of a Bank of America building in the chic 8th arrondissement, a couple of streets from the Champs-Elysees.

Police grabbed the man just after he placed a device, made of five litres of liquid, believed to be fuel, and an ignition system, one of the sources said.

The ignition component had 650 grams of explosive powder in it, according to an initial assessment. The whole device was taken to the Paris police's forensics lab for full analysis.

France's counter-terrorism prosecutor's office told AFP it had immediately taken over the investigation, and confirmed the suspect caught was in police custody.

It said the probe it has launched was into "attempted damage by fire or o...