Around 2.30am a youth appeared at the front of the group of rioters and fired a shot at police, who returned fire, police spokesperson Brigette Jullien told the AFP news agency.
Between 50 and 60 cars were torched by rioters, while shortly before midnight about 30 youths armed with baseball bats and iron bars attacked a tram in the La Villeneuve district and forced the passengers off. Police responded with tear gas.
Nobody was injured in the riots. The police said they made five arrests, two for setting fire to vehicles, and three for looting.
The incident started after a memorial service for Karim Boudouda who was killed 24 hours earlier during exchanges of gunfire with police. He was allegedly trying to hold up the Uriage-Les-Bains casino, near Grenoble.
Boudouda’s alleged accomplice escaped during the shootout and police found between 20,000 and 40,000 euros in the back of the getaway car.
The police acted in a legitimate way, according to prosecutor Jean Philippe. They fired in self-defense after being fired on at least three times, he said.