German for Jew - was sprayed in yellow paint on the window of a bagel shop in the city's 4th arrondissement on Saturday night.
The Council of Jewish Institutions in France (CRIF) called it a "revolting" act that "recalls the darkest hours of history". The 13th anniversary of his death was due to be commemorated on Wednesday and a new prize in his honour unveiled by the prime minister on Tuesday evening.
According to French authorities, registered incidents of anti-Semitism rose to 541 previous year from 311 in 2017, an increase of 74 percent. "Day after day, I'm noticing that symbols and venues our country cherishes are attacked".
The Paris prosecutor's office has now opened an investigation for "aggravated voluntary damage" and "provocation to racial hatred".
"One anti-Semitic tag in the middle of Paris is one too many", Interior Minister Christophe Castaner wrote on Twitter. The official was not authorized to be publicly named because the investigations are ongoing. Two trees planted at the scene where Ilan Halimi was found dying in a Paris suburb have been vandalized.
But Gilles Abecassis, co-founder of Bagelstein, said he did not believe that anti-government demonstrators, some of whom have shown support for a comedian convicted of anti-Semitism, were responsible. Castaner did not link the rise of incidents to any specific groups. Frederic Potier, a French government official in charge of fighting anti-Semitism, racism and discrimination based on sexual orientation, said some far-right groups have managed to infiltrate yellow-vest demonstrations.
"Anti-Semitic tags up to nausea in the heart of Paris this weekend", Potier tweeted with a picture of a wall with a derogatory inscription, insinuating that French President Emmanuel Macron was just a tool of a supposed Jewish plot. A survivor of Nazi death camps and a European Parliament president who died in 2017, Veil also spearheaded abortion rights as one of France's most prominent female politicians.
In a separate incident, one of the founders of bagel chain Bagelstein said the word "Juden" was painted on the window of one of their restaurants, although he insisted the inscription was found before Saturday's yellow-vest demonstrations in Paris.
Concerns that anti-Semitism might be growing in France pre-dated the protests that were started in the fall to oppose fuel tax increases.
The number of anti-Semitic acts in France rocketed 74 per cent past year as the interior minister warned the phenomenon was "spreading like a poison".
In 2011, an Islamist gunman shot dead a rabbi and three children at a Jewish school in Toulouse and in 2015 an extremist claiming allegiance to the Islamic State group killed four people at a kosher supermarket in Paris.