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 neighbouring Mali.
Nearly 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, Malaysians, Japanese and Europeans, at Tigantourine, deep in the Sahara.
Algerian media said a Briton and an Algerian were killed in the assault. Another local report said a Frenchman had died.
One thing is clear: as a headline-grabbing counterpunch to this week's French buildup in Mali, it presents French President Francois Hollande with a daunting dilemma and spreads the fallout from Mali's war against loosely allied bands of Al-Qaeda-inspired rebels far beyond Africa, challenging Washington and Europe.
A French businessman with employees at the site said the foreigners were bound and under tight guard, while local staff, numbering 150 or more, was held apart and had more freedom.
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 the Al-Qaeda, flush with men and arms from the defeated forces of Libya's Muammar Gaddafi, is building a haven in the desert.
Hollande, who won wide praise for ordering air strikes and sending troops to the former French colony, said little in response. In office for only eight months, he has warned of a long, hard struggle in Mali 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 per cent of Algeria's gas, much of which is pumped to Europe.
The militants, communicating through established contacts with media in neighbouring Mauritania, said they had dozens of men at the base, near the town of In Amenas close to the Libyan border, and that they were armed with mortars and anti-aircraft missiles.