UPDATE 6:00 PM PT: Sources close to the Jackson family tell us Grace Rwaramba -- the kids' nanny -- was driving the car with the kids inside. We're told the Jackson caravan was on the way to karate class, but the paparazzi gave chase ... and that's when one papper allegedly smashed into the back of the Jackson Escalade that wasn't carrying the kids.
UPDATE 5:45 PM PT: Law enforcement sources tell TMZ the car that was hit was a Jackson security car, which was following the car carrying the Jackson kids. The kids were NOT in the car that was struck by the paparazzo.
Cops also tell us a hit-and-run report was taken on the scene around 2:20 PM near the crash site in Sherman Oaks -- just a few miles from the Jackson home in Encino. It is currently under investigation.
UPDATE 5:30 PM PT: Witnesses tell TMZ the driver who struck the Jackson car fled the scene after impact. In California, leaving the scene of an accident without exchanging information is a crime. The D.A. could file a felony hit-and-run charge if the evidence is there.
UPDATE 5:15 PM PT: Joe Jackson tells us he spoke with Katherine and the kids are fine.
TMZ has learned Michael Jackson's kids were involved in a car accident moments ago in Sherman Oaks.
We're told a paparazzo -- not ours -- was following the Jackson car when the pap's gold Yukon rear-ended the Jackson car near the off-ramp of the 101 Freeway near Katherine Jackson's Encino home. Our sources say the accident wasn't severe and the kids are okay.
Story developing ...