ALGIERS/BAMAKO (Reuters) - Islamist gunmen holding dozens of Western hostages and scores of Algerians at a gas plant deep in the Sahara desert let some them speak to the media on Thursday to warn that they would be blown up if the site is stormed.
Governments around the globe were holding emergency meetings to respond to one of the biggest international hostage crises in decades, which sharply raises the stakes over a week-old French campaign against al Qaeda-linked fighters in neighboring Mali.
A group calling itself the "Battalion of Blood" says it seized 41 foreigners, including Americans, Japanese and Europeans, after storming a natural gas pumping station and employee barracks in Algeria before dawn on Wednesday.
The attackers have demanded an end to the French military campaign in Mali, where hundreds of French paratroops and marines are launching a ground offensive against rebels in a campaign that began a week ago with air strikes.
Algerian troops have the site surrounded, deep in the Sahara desert. An unidentified hostage who spoke to France 24 television said prisoners were being forced to wear explosive belts. Their captors were heavily armed and had threatened to blow up the base if the Algerian army tried to storm it.
"They attacked the two sites at the same time. They went inside, and once it was daylight they gathered everyone together," the man, who sounded calm, said in the only part of the phone call the French broadcaster aired.
Another hostage, identified as British, spoke to Al Jazeera television and called on the Algerian army to withdraw from the area to avoid casualties.
"We are receiving care and good treatment from the kidnappers. The (Algerian) army did not withdraw and they are firing at the camp," the man said.
"There are around 150 Algerian hostages. We say to everybody that negotiations is a sign of strength and will spare many any loss of life," he said, adding that there were about 150 Algerian hostages in custody.
Another hostage, identified as Irish, told the Qatar-based channel: "The situation is deteriorating. We have contacted the embassies and we call the Algerian army to withdraw ... We are worried because of the continuation of the firing. Among the hostages are French, American, Japanese, British, Norwegian and Irish."
In what it said was a phone interview with one of the hostage takers, the Mauritanian news agency ANI said Algerian security forces had tried to approach the facility at dawn.
"We will kill all the hostages if the Algerian army try to storm the area," it quoted the hostage taker as saying. Algeria has not commented on reports its troops tried to approach.
Algerian Interior Minister Daho Ould Kablia said the raid was led by Mokhtar Belmokhtar, a veteran Islamist guerrilla fighter who fought Soviet forces in Afghanistan in the 1980s and had 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.
NUMBERS UNCONFIRMED
The precise number and nationalities of foreign hostages could not be confirmed, with countries perhaps reluctant to release information that could be useful to the captors.
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 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. France has not confirmed whether any French citizens were held.
"This is a dangerous and rapidly developing situation," Britain's Hague told reporters in Sydney. "The safety of those involved and their co-workers is our absolute 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.
France's ambassador to Mali, Christian Rouyer, said the attack in Algeria demonstrated that the French were right on the need to intervene in Mali.
"We have the flagrant proof that this problem goes beyond just the north of Mali," Rouyer told France Inter radio. "Northern Mali is at heart of the problem, of course, but the dimension is really national and international, which gives even more justification to the French intervention."
Hollande has received backing from 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 in Mali, a poor country that was helpless to combat fighters who seized its northern cities last year.
The Algerian government has ruled out negotiating with the hostage takers and the United States and other Western governments condemned the attack on a facility 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 and had rigged it with explosives.
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.
GOVERNMENTS HELD RESPONSIBLE
"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.
Regis Arnoux, head of CIS, a French catering firm operating at the site, told BFM television he had been in touch with a manager of some 150 Algerian workers there. Local staff were being prevented from leaving but were 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.
In Mali, France said on Wednesday its forces were about to launch a ground assault on the rebels they began targeting from the air last week. Residents said a column of some 30 French Sagaie armoured vehicles 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. The Mali rebels who seized Timbuktu and other oasis towns in northern Mali last year had imposed Islamic law, including public amputations and beheadings, that angered many locals.
"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."
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.
The United Nations has authorized an African force to fight the rebels, and about 2,000 troops from Nigeria, Chad, Niger and other states are expected 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, Marine Pennetier, and Nick Vinocur in Paris, David Alexander in Rome, Andrew Quinn in Washington, Jane Wardell in Sydney, Omar Fahmy in Cairo, Mirna Sleiman in Dubai and Kaori Kaneko in Tokyo; Writing by Peter Graff and Alastair Macdonald)
Huge Sahara hostage siege turns Mali war global
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