Extremists must stop using the Palestinian cause to justify their acts of violence, Palestinian Prime Minister Salam Fayyad said on Wednesday after a deadly attack on a French Jewish school.

"It is time for these criminals to stop marketing their terrorist acts in the name of Palestine and to stop pretending to stand up for the rights of Palestinian children who only ask for a decent life," the Palestinian premier said in a statement.

His remarks came as French special forces in the southern city of Toulouse were locked in a tense stand-off with a self-declared Islamist militant of Algerian origin believed to have carried out Monday's attack.

He has told officials that he attacked the school and killed three Jewish children and a teacher to avenge Palestinian children killed in the conflict with Israel.

Speaking to reporters, Interior Minister Claude Gueant said the suspect had told police he wanted "to avenge Palestinian children and to attack the French army."

In Monday's attack, the gunman opened fire on a group of parents and children at Ozar Hatorah school in Toulouse, killing a 30-year-old teacher and his two sons, aged four and five, as well as the seven-year-old daughter of the school principal.

Fayyad heaped condemnation on the attack. "This terrorist crime is condemned in the strongest terms by the Palestinian people and their children," he said. "No Palestinian child can accept a crime that targets innocent people."