A Briton is believed to be one of two people killed in an ongoing attack on a BP gas facility in Algeria. The attackers say 41 hostages have been taken in revenge for attacks on Islamists in Mali.

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One of the leaders of the Jihadi insurgent group which claims responsibility for the attack on the BP In Amenas gas facility says they are holding more than 40 foreign hostages. The raid, he claimed, was "in response to, and in revenge for" Algeria's decision to open its airspace to French fighter aircraft en route to Mali.

"The Battalion of those who Sign their Names in Blood" - which is led by Khaled Abu al-Abas, alias Mokhtar bil-Mokhtar (pictured) - claims it is holding 41 hostages, among them seven Americans, two French nationals, two Britons and two Japanese. Five of those abducted reportedly remain in the refinery itself, 36 in a nearby residential compound. Two others were reportedly killed in the initial attack. One is believed to be British, although the Foreign and Commonwealth Office is yet to confirm this.

The Mauritanian online news agency "Sahara Medias" claims to have spoken to one of the battalion's spokesman by telephone, following the abductions in Algeria. The fighters, who are also known as "The Masked Men" reportedly defected from al Qaeda in the Islamic Maghbreb two months ago and say they are affiliated to one of the three Islamist insurgent groups operating in northern Mali.

Mokhatar Belmokhatar

Ongoing violence?

The group told Sahara Medias that 400 Algerian soldiers were guarding the desert oil installation and that their fighters did not target them. But the Algerian online newspaper Eshorouk contradicts this, reporting that clashes were continuing on Wednesday afternoon and that Islamist insurgents remained under seige from Algerian forces, who were using helicopters in their counter-attack.

The Algerian online newspaper, which has connections with the security establishment, reported that the attack began before dawn, when the jihadi fighters arrived in a number of four-wheel-drive vehicles with foreign number plates. They surprised and overpowered the guards, the paper said. A bus, apparently leaving the compound for the airport, was attacked, it said, which led to the two reported fatalities. Later reports mentioned a third casualty, an Algerian security guard.

Read more: French intervention in Mali - what happens next?

Seven wounded men were evacuated to a hospital in In Amenas, 45 miles away. Two of them are foreigners, Eshorouk said, adding that they were expected to be medevac'ed to the United Kingdom. The company has stopped pumping gas, the paper said, fearing the facility may have been sabotaged by the attackers.

This is reported to have been the first such terrorist attack against a petrochemicals plant in Algeria. These facilities are well guarded - often by foreign security personnel - owing to the numer of foreign workers.

A Foreign Office spokesperson told Channel 4 News that the situation on the ground in Algeria was "still fluid." In a statement, the FCO said "There is an ongoing terrorist incident near the town of In Amenas… We can confirm that British national are caught up in this incident."

The FCO spokesperson would not say how many Britons were involved or comment on the report that more than 40 foreign hostages had been taken. "We are aware of the reports," the spokesperson said, "but we must deliberately be light on detail as this is a live situation." The FCO said it was too early to comment on the claim of responsibility.

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Warning of attacks

On Sunday, as France deployed its forces to battle jihadi forces in Mali, the Emir of al-Qaeda in the Islamic Maghreb - one of the three groups occupying northern Mali - forewarned of imminent revenge attacks. Abu Musab Abd al-Waddoud said:

"I direct my message to those who insist on this oppressive war. If you want peace in your countries," he said, "we welcome that. If you want war, we will fulfil your desire and the Great Sahara shall become your graveyard."