(NEW YORK) -- The Algerian government has reportedly mounted a military operation to rescue dozens of hostages, including Americans, being held by an al Qaeda-affiliated group at a natural gas plant in Algeria.
According to British officials, a military counterterror operation is underway. Reports that as many as 35 hostages and 15 Islamist militants at the facility in In Amenas have been killed during a helicopter raid have not been confirmed.
According to an unconfirmed report by an African news outlet, the militants say seven hostages survived the attack, including two Americans.
In a statement, BP, a joint owner of the facility, said it had been told by both the British and Algerian governments that "the Algerian Army is attempting to take control of the In Amenas site."
"Sadly, there have been some reports of casualties but we are still lacking any confirmed or reliable information," said the statement. "There are also reports of hostages being released or escaping."
Algeria troops had surrounded the compound in the Sahara desert, where hostages from the U.S., Algeria, Norway, Japan, France and other countries are being held by terrorists who claim to be part of Al Qaeda and are led by a one-eyed smuggler known as Mr. Marlboro.
Defense Secretary Leon Panetta told ABC News that as many as 100 hostages are being held, and that there may be seven or eight Americans among them. The kidnappers have released a statement saying there are "more than 40 crusaders" held "including 7 Americans."
U.S. officials had previously confirmed to ABC News that there were at least three Americans held hostage at the natural gas facility jointly owned by BP, the Algerian national oil company and a Norwegian firm at In Amenas, Algeria.
"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," said Panetta.
The terror strike came without warning Wednesday morning when an estimated 20 gunmen first attacked a bus carrying workers escorted by two cars carrying security teams.
At least one worker was killed. The terrorists moved on to the residential compound where they are now holed up with the American and other western hostages, including Norwegian, French, British and Japanese nationals.
There is growing concern Thursday morning about the fate of the hostages, and intelligence officials say the situation is tense. Without the element of surprise, they say, a raid to free them will be very dangerous.
"They are expecting an attack and therefore, it's going to be very, very difficult for Algerian special forces to sneak in without being seen," said Richard Clarke, a former White House counter terrorism advisor and now an ABC News consultant.
Intelligence officials believe the attack was masterminded by Mokhtar Belmokhtar, a rogue al Qaeda leader who also runs an African organized crime network that reportedly has made tens of millions of dollars in ransom from kidnappings and smuggling. He is known as Mr. Marlboro because of his success smuggling diamonds, drugs and cigarettes.
Belmokhtar fought in Afghanistan alongside the mujahideen against the Soviets in the 1990s, and lost an eye. He was formerly associated with al Qaeda's North African affiliate, al Qaeda in the Islamic Maghreb (AQIM), and was said to be a liaison with al Qaeda's international leadership.
Belmokhtar split with AQIM late last year over what other Islamist militants considered his preference for lucre over jihad. He remains affiliated with al Qaeda, however, heading a breakaway group that calls itself the "Signers with Blood Brigade" or the "Veiled Brigade."
According to a Canadian diplomat who was held hostage by Belmokhtar, Mr. Marlboro is "very, very cold, very businesslike."
Robert Fowler was a UN diplomat in Africa when he was kidnapped and held hostage by Belmokhtar for four months in 2009.
"I was afraid for my life all the time," recalled Fowler, "when I woke up in the morning and when I went to sleep at night. He's a very serious player." Fowler wrote a book about his ordeal called A Season in Hell.
Intelligence officials say the situation would be much easier if all the terrorists wanted was money. But Belmokhtar's group says it will not release the hostages in Algeria until France stops its military action against the al Qaeda regime that has taken control of the northern sector of the neighboring country of Mali.
"We bear the Algerian and French government and the countries of the hostages' full responsibility in not speeding up the implementation of our demands [to stop] the aggressive assault on our people in Mali," said the group in its latest statement.
France says it will not negotiate with terrorists.
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