Mohamed Merah died in a shoot-out with police at his flat in Toulouse
The mayor of Toulouse has said gunman Mohamed Merah’s burial in the city would be “inappropriate”.
Merah’s funeral was due on Thursday, but Mayor Pierre Cohen’s office said it had been delayed by 24 hours.
President Nicolas Sarkozy told French TV he should be allowed to be buried in France.
Merah, 23, killed seven people, including three children, in south-western France before he was shot dead in a siege at his home last week.
“Following Algeria’s last-minute refusal to accept Mohamed Merah’s body, Mayor Pierre Cohen feels that his burial within the city of Toulouse is inappropriate,” his office said on Thursday, according to French news agency AFP.
“Therefore he has asked the regional prefect to delay the burial by 24 hours and is raising the matter with the government.”
However, President Sarkozy told France’s BMFTV news channel that Merah’s burial in France should go ahead, AFP reports.
“He was French. Let him be buried and let’s not have any arguments about it,” Mr Sarkozy said.
Earlier, Algerian authorities had reportedly denied permission for Merah to be buried there.
Algerian officials cited security concerns as the reason for the refusal to bury him there, said Abdallah Zekri of the Muslim Council of France.
Family members had been hoping to escort Merah’s body to Algeria, where the family is originally from.
The family had planned to hold the funeral in a village in the province of Medea, about 80km (50 miles) south of the capital, Algiers, French media say.
The Reuters news agency said an Algerian government source had confirmed the decision not to allow the burial to take place in Algeria.
Police have found an abandoned car near Toulouse with possible links to Merah and the attacks, French media say.
The car was discovered by residents late on Wednesday in St Papoul, a village near the town of Castelnaudary, the Midilibre regional daily reported.
The grey Renault Clio contained parts of a Yamaha Tmax scooter identified as the same type thought to have been used by Merah to travel to the scenes of the murders, reports say.
The car’s owner has been identified as a man living in the same Toulouse block of flats as Merah, France 3 TV quoted a source close to the investigation as saying.
French newspapers say the discovery supports theories that Merah may have had an accomplice.
The killer’s elder brother, Abdelkader Merah, is said to have told investigators that a third man was present with the pair when the scooter used in the attacks was stolen, Le Parisien newspaper reports.
Abdelkader Merah is being held on preliminary charges of complicity with his brother.
Merah died in a police assault on his flat in Toulouse on 22 March after a 32-hour siege. He had killed three soldiers in two separate attacks before shooting dead three children and a teacher at a Jewish school.
Merah is said to have told police he wanted to avenge Palestinian children and to attack the French army because of its foreign interventions.
His father, Mohamed Benalal Merah, has said he has hired an Algerian lawyer to sue French special police over his son’s death.