All of the jewels looted in a multi-million-euro robbery at the Ritz hotel in Paris have been recovered, a source close to the case said Thursday, as a police hunt for two of the robbers continued.

In the latest of a series of audacious heists in France, a gang armed with hatchets and handguns burst into the five-star hotel on the capital's glitzy Place Vendome on Wednesday evening and smashed the display windows of jewellery shops on the ground floor.

The robbers, wearing balaclavas and gloves, entered through a rear staff entrance and swiped gems and watches worth over four million euros ($4.8 million).

But the plot began to unravel as soon as they attempted to make their getaway, with three men arrested when they came up against locked doors as they tried to flee out the back of the building.

Some of the loot was recovered after being dropped during those arrests, a source told AFP.

The rest of the jewels and watches were found in a bag dropped by one of the two robbers who got away, another source said.

The three arrested men, all around 30 years old, are from the Seine-Saint-Denis area north of Paris, and are "well known to the police for armed robbery, violent crime and receiving stolen goods", a source close to the inquiry said. Police extended their custody for a further 24 hours on Thursday night.

The incident took place at about 6:30 pm (1730 GMT) as the streets of Paris were busy with people making their way home from work.

A police team in charge of patrolling the square -- home to some of Paris's top jewellers and watchmakers, as well as the justice ministry -- was quickly on the scene.

- Attractive target -

Several luxury brands display their jewels in the storied Ritz, famous as the lodging of choice for Coco Chanel and Ernest Hemingway as well as Britain's Princess Diana, who spent her final hours there before dying in a car crash in a Paris tunnel in 1997.

The hotel, opened in 1898, has been owned by Egyptian billionaire Mohamed Al-Fayed since 1979.

Wednesday's robbery took place 18 months after the Ritz's palatial doors were re-opened to guests following nearly four years of renovations and a massive fire.

On finding their escape route blocked the thieves threw the loot out of a window to two accomplices waiting outside.

One of the two accomplices escaped in a car that was found abandoned north of Paris.

The other made a getaway on a motorbike, dropping a bag of jewels and knocking over a pedestrian while speeding the wrong way up a one-way street.

The hotel's management has declined to comment on the robbery.

Place Vendome has been the scene of several heists in recent years.

- Long list of heists -

Interior Minister Gerard Collomb praised officers for quickly apprehending three of the robbers, saying they had "done our police force credit".

But the audacious strike at one of Paris's most glamorous hotels could cast a cloud over the Ritz's image.

France has found itself repeatedly in the headlines for high-profile robberies, particularly in Paris and on the Riviera.

Security around Place Vendome was reinforced in 2014 after five high-end jewellery and watch stores were hit by armed robberies in less than seven months.

The losses in those attacks ranged from 420,000 euros to two million euros.

In October 2016, US reality TV star Kim Kardashian was the target of one of the biggest heists in recent years while attending Paris Fashion Week.

Five men held Kardashian at gunpoint in the luxury apartment where she was staying, making off with a diamond ring and other jewellery valued in total at nine million euros.