Islamists attacked a gas field in eastern Algeria, killing two people and seizing hostages, including Westerners, Algeria's interior minister said Wednesday.
The incident may be linked to France's military support for the government of nearby Mali, according to reports from the region.
The Westerners, accompanied by Algerian security forces, were en route to In Amenas Airport when they were attacked early in the morning by a group of no more than 20 people, the official, Diho Weld Qabliyeh, told Algerian state television. The security forces returned fire, and the attackers withdrew to the base of the petroleum operation, some 3 kilometers away, he said.
Upon arrival at the base, he continued, the attackers "took in a number of Westerners and Algerians -- some people told us they were nine, some people told us 12."
U.S. State Department spokeswoman Victoria Nuland said Americans were among the hostages.
Accounts over the number differed.
An Algerian and a Westerner were killed in the attack, and two other Westerners, two of the security forces and two guards from the base were wounded, Qabliyeh said.
A spokesperson for Britain's Foreign Office, citing the Algerian government, said a British national was among the dead.
British Foreign Minister William Hague, speaking in Sydney, Australia, said the captives included "a number of British nationals."
Hague said the Foreign Office had sent a "rapid deployment team" to Algiers to beef up staffing at the embassy.
Algerian military forces were surrounding the building holding the hostage-takers and the hostages, Qabliyeh said.
Late Wednesday, the hostage-takers released the Algerians they had been holding but continued holding the Westerners, Algerian state television reported.
The group has issued demands, but they elicited no response, Qabliyeh said. "The authorities do not negotiate, no negotiations; we have received their demands, but we didn't respond to them," he added.
A Mauritanian news agency, Al Akhbar, said the attackers demanded in a news release an end to "brutal aggression on our people in Mali."
It cited "blatant intervention of the French crusader forces in Mali" and accused the world of having left Syria's people "groaning under the pressure of the butcher" President Bashar al-Assad.
The news release said they chose to carry out the operation in Algeria because the country's president, Abdelaziz Bouteflika, had allowed French military forces to cross Algerian air space in attacking Mali.
A U.S. official was skeptical. "The level of planning suggests that this was in train before the French overflights ever took place," the official said. That view was echoed by another U.S. official, who told CNN's Erin Burnett that, "as of now, the attack appeared organized," not put together quickly or opportunistic.
The official said it was likely that the attackers had cited Algeria's opening of its air space to French fighters as the reason for the attack to protect their operational methods and make the attack appear spontaneous.
The news release put the number of hostages at "more than 40," including seven Americans, two French, two British and a number of other Europeans.
An Islamist group claiming responsibility for the attack told the Mauritanian News Agency and Sahara Media that 41 "Westerners including seven Americans, (as well as) French, British and Japanese citizens have been taken hostage."
But the real number of U.S. hostages could be as few as three, two U.S. officials said Wednesday.
The Algerian Press Service, citing a source from the provincial administration of Illizi, reported that "a little more than 20 foreign nationals are held hostage."
Defense Secretary Leon Panetta, in Europe meeting with NATO allies, called the incident "a terrorist attack."
Nine or 10 Americans were working at the site, and U.S. officials were trying to determine who had been abducted, a State Department official told CNN.
The source said the abductors were demanding that members of their group being held prisoner be released and sent to northern Mali. The official was not clear about where the prisoners were.