Islamists Take Foreign Hostages in Algeria, Demand End to French Intervention in Mali

Action part of war against 'Jews and crusaders,' says al-Qaeda affiliate, which claims it is holding 41 hostages; Algerian government refuses to negotiate with group.

Islamist gunmen holding a group of expatriate workers hostage at a natural gas field in southeast Algeria on Wednesday demanded an "immediate end" to France's intervention in neighboring Mali.

"Our kouzwa [raid] is part of an international campaign to combat Jews and crusaders," an al-Qaeda-affiliated group that says it has 41 foreigners hostage - including seven Americans, two French nationals and two Britons - was quoted by Mauritania's ANI news agency as saying.

The group said it held the Algerian and French governments and the hostages' homelands "fully responsible for the delay in satisfying our demands, chief among which is the immediate end to the attack on our people in Mali."

In an earlier statement the group said it wanted to punish Algeria for allowing French warplanes to overfly the country on bombing missions to Mali.

Algerian Interior Minister Dahou Ould Kablia told local television that the authorities "will not answer the terrorists' demands and refuse all negotiation."

Security forces have surrounded the wing of the compound, where the gunmen, who numbered around 20 and were from Algeria, were holed up with the hostages.

Ould Kablia confirmed the gunmen were led by the one-eyed terrorist leader Mokhtar Belmokhtar, a former chief of the al-Qaeda in Islamic Maghreb (AQIM) terrorist group, who formed his own brigade last year but is believed to be still affiliated with AQIM.

The Dernieres Nouvelles d'Algerie newspaper reported that the attackers had threatened to blow up the site if the army launched a raid to free the hostages.

The In Amenas natural gas field, one of Algeria's largest, lies about 100 kilometers from the border with Libya. It is operated by Britain's BP, along with Norway's Statoil and Algerian state company Sonatrach.

The group launched the attack on the compound before dawn on Wednesday.

A Briton and an Algerian were killed and six others wounded when the gunmen, who were travelling in three vehicles, attacked a bus about to depart for a nearby airport, the Algerian Interior Ministry said.

The gunmen then stormed the compound.

US Defense Secretary Leon Panetta confirmed that Americans are among the hostages.

"The United States strongly condemns these kinds of terrorist acts," Panetta said in Rome. "It is a very serious matter when Americans are taken hostage, along with others." The United States will take "all necessary and proper steps" to deal with the situation, he said.

Secretary of State Hillary Clinton has spoken with the US ambassador in Algiers and Algerian Prime Minister Abdelmalek Sellal.

Norwegian Prime Minister Jens Stoltenberg said 13 Norwegian nationals were caught up in the crisis, which he called one of the most serious yet involving Norwegian citizens.

One Norwegian oil worker telephoned his wife to say he had been taken hostage, she told Norway's Bergens Tidende newspaper.

Japanese engineering company JGC Corporation said it believed that five of its workers were also among those kidnapped, while Ireland confirmed an Irishman was in the group.

British-based security firm Stirling Group told Norway's Verdens Gang newspaper that it was in negotiations to secure the release of the hostages.

"We are working closely with the authorities and military in Algeria, the talks have gone on a while," the newspaper quoted managing director Mike Lord as saying.

APS news agency reported Wednesday evening that the gunmen had released local workers.

AQIM has already claimed responsibility for the kidnapping of six hostages in the region since 2010. French media said the leader of the group behind Wednesday's attack, Mokhtar Belmokhtar, had been behind several kidnappings.

The attack comes as French and Malian forces step up their campaign against AQIM and two other Islamist groups who have controlled northern Mali for nearly a year and had recently begun to push south.

Defending the intervention Wednesday, French President Francois Hollande said: "It's by being firm, and intervening as we are doing in Mali, that we make kidnappers and hostage-takers give in."