The raid had been intended to rescue a captured secret-service agent but led to his reported death and the loss of one of his would-be rescuers.
Another French commando is listed as missing amid claims that he was captured by Islamist fighters belonging to the al-Shabaab movement.
Details of Friday night'sraid on a compound south of Mogadishu emerged during a day of grim news for France's military.
An hour later, it was confirmed that a French combat helicopter pilot had died of his wounds during the military intervention in Mali, where hundreds of French soldiers are leading the effort to seize back the north of the country from Islamist rebels against the government in Bamako.
The sudden escalation in Mali came after western governments voiced alarm following the capture of the town of Konna by Islamists on Thursday in their first major drive towards the capital, Bamako, since they seized control of the north last spring.
The west African regional bloc, Eco, has authorised the immediate deployment of troops to Mali.
More than 100 people are said to have died in the air raids and fighting at Konna.
The secret service agent, Denis Allex, is believed to have been killed by his captors during a failed helicopter raid in Bula Mareer, 70 miles south of Mogadishu. The assault faltered after resistance at the compound, which was reinforced by fighters at a neighbouring training camp.
Confirmation that a member of the rescue force was "missing" came amid claims from al-Shabaab that it had captured a French soldier. They added that Allex was still alive and in their custody. France said Allex was dead.
Residents of the town described explosions and gunfire while an al-Shabaab official said that the fighting began after helicopters had dropped off commandos.
The French Ministry of Defence said: "Faced with the intransigence of the terrorists, who refused for three years to engage in all negotiations, and who were holding Denis Allex in inhumane conditions, an operation was planned and set in effect."
French defence minister Jean-Yves Le Drian insisted that France had to act quickly to stop the Islamist offensive, which he said could lead to the emergence of "a terrorist state at the doorstep of France and Europe".