ALGIERS/BAMAKO - (Reuters) - Islamist fighters have opened an international front in Mali's civil war by taking dozens of Western hostages at a gas plant in the Algerian desert just as French troops launched an offensive against rebels in neighboring Mali.
More than 24 hours after gunmen stormed the natural gas pumping site and workers' housing before dawn on Wednesday, little was certain beyond a claim by a group calling itself the "Battalion of Blood" that it was holding 41 foreign nationals, including Americans, Japanese and Europeans, at Tigantourine, deep in the Sahara.
British Foreign Secretary William Hague confirmed one Briton had been killed and "a number" of other British citizens were being held. Algerian media said an Algerian was killed in the assault. Another local report said a Frenchman had died.
The precise number and nationalities of foreign hostages could not be confirmed.
The militants said seven Americans were among their hostages - a figure U.S. officials said they could not confirm. Norwegian oil company Statoil said nine of its Norwegian staff and three Algerian employees were captive. Japanese media said five workers from Japanese engineering firm JGC Corp. were held.
"This is a dangerous and rapidly developing situation," Britain's Hague told reporters in Sydney on Thursday.
"We have sent a rapid deployment team from our Foreign Office in order to reinforce our embassy and consulate staff there. The safety of those involved and their co-workers is our absolutely priority and we will work around the clock to resolve this crisis."
U.S. Defense Secretary Leon Panetta said: "I want to assure the American people that the United States will take all necessary and proper steps that are required to deal with this situation."
Japan's Prime Minister Shinzo Abe, in Vietnam on the first leg of a Southeast Asian tour, told reporters that "Japan will never tolerate such an act", according to the Jiji news agency. His government held an emergency meeting and said it was working with other countries to free Japanese citizens.
One thing is clear: as a headline-grabbing counterpunch to this week's French buildup in Mali, it presents French President Francois Hollande with stark choices and spreads fallout from Mali's war against loosely allied bands of al Qaeda-inspired rebels far beyond Africa, challenging Washington and Europe.
Led by an Algerian veteran of guerrilla wars in Afghanistan, the group demanded France halt its week-old intervention in Mali, an operation endorsed by Western and African allies who fear that al Qaeda, flush with men and arms from the defeated forces of Libya's Muammar Gaddafi, is building a desert haven.
Hollande, who won wide praise for ordering air strikes and sending troops to the former French colony Mali last week, said little in response. In office for only eight months, he has warned of a long, hard struggle and now faces a risk of attacks on more French and other Western targets in Africa and beyond.
The Algerian government ruled out negotiating and the United States and other Western governments condemned what they called a terrorist attack on a facility, now shut down, that produces 10 percent of Algeria's gas, much of which is pumped to Europe.
The militants, communicating through established contacts with media in neighboring Mauritania, said they had dozens of men armed with mortars and anti-aircraft missiles at the base, near the town of In Amenas close to the Libyan border.
They said they had repelled a raid by Algerian forces after dark on Wednesday. There was no government comment on that. Algerian officials said earlier about 20 gunmen were involved.
LIVES AT RISK
The militants issued no explicit threat but made clear the hostages' lives were at risk: "We hold the Algerian government and the French government and the countries of the hostages fully responsible if our demands are not met and it is up to them to stop the brutal aggression against our people in Mali," read one statement carried by Mauritanian media.
They condemned Algeria's secularist government for letting French warplanes fly over its territory to Mali. They also accused Algeria of shutting its border to Malian refugees.
The group also said its fighters had rigged explosives around the site and any attempt to free the hostages would lead to a "tragic end."
Algerian Interior Minister Daho Ould Kablia said the raid was led by Mokhtar Belmokhtar, who fought Soviet forces in Afghanistan in the 1980s and recently set up his own group in the Sahara after falling out with other local al Qaeda leaders.
A holy warrior-cum-smuggler dubbed "The Uncatchable" by French intelligence and "Mister Marlboro" by some locals for his illicit cigarette-running business, Belmokhtar's links to those who seized towns across northern Mali last year are unclear.
French media said the militants were also demanding that Algeria, whose government fought a bloody war against Islamists in the 1990s, release dozens of prisoners from its jails.
The head of a French catering company said he had information from a manager who supervises some 150 Algerian employees at the site. Regis Arnoux of CIS Catering told BFM television the local staff was being prevented from leaving but was otherwise free to move around inside and keep on working.
"The Westerners are kept in a separate wing of the base," Arnoux said. "They are tied up and are being filmed. Electricity is cut off, and mobile phones have no charge.
"Direct action seems very difficult. ... Algerian officials have told the French authorities as well as BP that they have the situation under control and do not need their assistance."
Norway's Statoil operates the gas field in a joint venture with Britain's BP and the Algerian state company Sonatrach.
"Our total focus is on fixing this situation and returning our colleagues home," Statoil CEO Helge Lund told a news conference in Stavanger, western Norway. "Family, friends and colleagues are waiting for news from them."
Lund will travel later Thursday to Bergen, western Norway, to a crisis centre set up in a hotel by the company where some relatives of the hostages are gathering.
Japan's JGC Corp. said in a statement it was cooperating with the government but would not comment the number of its employees kidnapped.
INTERNATIONAL SUPPORT
French forces, which began air strikes against the Mali rebels last Friday, were hours from a ground attack on Wednesday, army chief Edouard Guillaud said.
Mali residents said a column of some 30 French Sagaie armored vehicles had set off toward rebel positions from the town of Niono, 300 km (190 miles) from the capital, Bamako.
Many inhabitants of northern Mali have welcomed the French attacks, although some also fear being caught in the cross-fire.
Hollande has sent hundreds of paratroopers and marines to fight the Mali rebels who seized Timbuktu and other oasis towns in northern Mali last year and imposed Islamic law, including public amputations and beheading.
The rebels include fighters from al Qaeda's mainly Algerian-based North African wing AQIM as well as home-grown Malian groups Ansar Dine and MUJWA. Islamists have warned Hollande that he has "opened the gates of hell" for all French citizens.
Panetta said Washington was still studying legal and other issues before providing more help to France in the war in Mali.
The United Nations has authorized an African force to fight the rebels. It was expected to start only in September, but the French intervention speeded the timetable; about 2,000 troops from Nigeria, Chad, Niger and other states are expected soon.
Chad's foreign minister, Moussa Faki Mahamat, told Radio France International his country alone would send 2,000 troops, suggesting plans for the regional force were already growing.
A Malian military source said French special forces units were taking part in the operation. Guillaud said France's strikes, involving Rafale and Mirage jet fighters, were being hampered because militants were sheltering among civilians.
Hollande said on Tuesday that French forces would remain in Mali until stability returned to the West African nation.
The conflict, in a landlocked state of 15 million twice the size of France, has displaced an estimated 30,000 people and raised concerns across mostly Muslim West Africa of a radicalization of Islam in the region.
But many who have lived for many months under harsh and violent Islamist rule said they welcomed the French.
"There is a great hope," one man said from Timbuktu, where he said Islamist fighters were trying to blend into civilian neighborhoods. "We hope that the city will be freed soon."
(Additional reporting by Pascal Fletcher and Andrew Callus in London, Balazs Koranyi in Oslo, Laurent Prieur in Nouakchott, Daniel Flynn in Dakar, John Irish, Catherine Bremer and Nick Vinocur in Paris, David Alexander in Rome, Andrew Quinn in Washington, Jane Wardell in Sydney and Kaori Kaneko in Tokyo; Writing by Alastair Macdonald; Editing by Peter Graff)
