A number of foreign hostages at a besieged Algerian gas plant have reportedly been freed in the wake of a military strike which news agencies say has killed several people.
Mauritania's ANI news agency reported the deaths citing one of the kidnappers who had earlier taken 41 people captive at the compound near the border with Libya.
A large explosion has been heard away from the accommodation block at the remote desert complex, Sky sources said.
The official Algerian APS news agency said a number of foreign hostages were free. The Irish foreign ministry says 36-year-old Stephen McFaul, who was among them, is understood to be safe.
APS also said as many as 600 Algerian workers at the site managed to flee the plant, and an American military official said at least one US unarmed drone was flying over the complex.
News agency Reuters spoke to a local resident who said many people were killed in the military operation, which the Algerian government confirmed it was carrying out.
The Algerian government said it had to act "immediately" to intervene in the hostage crisis, according to Downing Street.
David Cameron's spokesman said Britain was not given prior notice of the operation, adding it was ongoing and the situation was "very grave and serious".
Mr Cameron was informed the operation was under way when he telephoned the Algerian prime minister at 11am today, the spokesman added.
And the British PM made clear he would have preferred to be informed in advance of the military action, the spokesman went on.
There have been conflicting reports as to the number of casualties, with Reuters citing a local source as saying six foreign hostages and eight rebels were killed.
The source said some hostages were still being held.
ANI said the attackers' spokesman had claimed that Algerian forces opened fire as the militants tried to leave the energy complex with hostages.
The facility is run jointly by BP, the Norwegian energy firm Staoil and the Algerian state oil company.
On Wednesday a Briton and an Algerian were killed when around 20 gunmen from an al Qaeda-backed group stormed the In Amenas facility.
Among the UK nationals taken hostage by the group were Scottish nationals, Scottish National Party leader Alex Salmond confirmed earlier.
Al Qaeda-linked militant group Katibat Moulathamine - The Masked Ones - claimed responsibility for the attack.
The group said it was retaliating for French military intervention against al Qaeda-backed rebels in neighbouring Mali, where France now has 1,400 troops on the ground.
Foreign Secretary William Hague earlier said he was sceptical the attack was a retaliation over the offensive against Islamist fighters in Mali because it would take longer to plan.
BP said it was evacuating a group of workers from Algeria after Islamist gunmen took dozens of foreigners hostage at the In Amenas plant.
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