Thirty hostages were feared dead after Algerian troops stormed a desert gas field seized by a jihadist group in a disastrous end to the worst international hostage crisis of recent years.
Reuters news agency quoted an Algerian security source as saying that the 30 victims included eight Algerians, two Britons, two Japanese and one French national, and that the nationality of the remaining 17 hostages killed in the battle had not been confirmed. Earlier in the day, the militants claimed 34 western hostages had lost their lives in the Algerian rescue attempt. Eleven jihadists were also reported to be killed.
One British contractor died in the initial jihadist attack on the In Amenas gas field on Wednesday morning, but prime minister David Cameron warned that the country "should be prepared for further bad news in this very dangerous, fluid situation". The Foreign Office called it "an appalling tragedy".
Algeria's state news agency APS saidthe military operation to free hostages had ended, quoting an unnamed official source who gave no further details.
Mohamed Saïd, the Algerian communications minister, earlier confirmed that several hostages had been killed but said troops had been forced to act to free them due to the "diehard" attitude of their captors. "The operation resulted in the neutralisation of a large number of terrorists and the liberation of a considerable number of hostages," Saïd said, according to the New York Times. "Unfortunately, we deplore also the death of some, as well as some who were wounded. We do not have final numbers."
Officials said 600 Algerian workers at the site had been freed and more than 20 foreigners had survived.
Norway's Statoil company said it was unable to account for nine Norwegian employees who had been at the In Amenas gas field at the time of the raid.
The Algerian government said it was necessary to take instant action to end the standoff as the jihadist group, known as the Signers in Blood, had intended to take the hostages out of the country.
An Algerian source quoted by Reuters said three Egyptians, two Algerians, two Tunisians, two Libyans a Frenchman and a Malian, were among the 11 militants killed.
"The terrorists told us at the very start that they would not hurt Muslims but were only interested in the Christians and infidels," one survivor, a 53-year-old local man called Abdelkader, told Reuters.
The British government complained it had not been informed before the military operation was launched. Cameron was only told once it was under way and immediately demanded an explanation from Algiers. Washington and Paris indicated they too had been left in the dark.
There were also questions about the tactics used by the Algerians to break the hostage standoff. Several reports from the scene describe helicopter gunships strafing the workers' living quarters where the hostages were being held. The militants claimed they still held seven hostages: two Americans, three Belgians, one Japanese and one British citizen.
One of the survivors was Stephen McFaul, an Irish national, who called his wife, Angela, in west Belfast at 3pm to say he was alive and free. McFaul said the Algerian army bombed four jeeps carrying fellow captives and probably killed many of them, his brother Brian told Reuters. McFaul told his family that he survived because he was on the only one of five jeeps not hit by Algerian bombs.
"They were moving five jeep-loads of hostages from one part of the compound. At that stage, they were intercepted by the Algerian army. The army bombed four out of five of the trucks and four of them were destroyed," Brian McFaul said.
"The truck my brother was in crashed and Stephen was able to make a break for his freedom. He presumed everyone else in the other trucks was killed."
Brian McFaul said he did not speak to Stephen directly, but got an account from Stephen's wife Angela after she spoke to him. The hostages had their mouths taped and explosives hung from around their necks, McFaul added.
The White House said it was concerned about the loss of life and was seeking clarification. A senior official told journalists travelling with the US defence secretary, Leon Panetta, in the UK: "Details remain very murky over this raid and what has happened. We're assessing reports that the Algerians may have conducted some kind of action in connection with the incident, but cannot confirm precisely what happened."
French president François Hollande told business leaders the hostage crisis "seems to be heading towards an end in dramatic conditions" and the violence in Algeria justified his decision last Friday to launch a military campaign against Islamist militants in neighbouring Mali.
The Algerian raid, thought to have been spearheaded by the army's special intervention group, was carried out only hours after Britain had said its "focus is on working through the Algerian government and BP", a partner in the gas field.
According to Downing Street, Cameron learned of the rescue attempt from British officials in Algiers in touch with London by satellite link. He then rang the Algerian prime minister at 11am to be informed that the operation was already under way, despite an earlier appeal by the British prime minister that no substantial action be taken without first consulting him.
"The prime minister explicitly told the Algerians he wanted advance warning of any military operation, but they just went for it," a Downing Street source said.
One source described the 10-15 minute phone call as businesslike, but stressed that no British judgment would be made on the operation while it was still under way. However, a spokesman said: "The prime minister explained we would have preferred to be consulted in advance."
The prime minister made that view known first in a phone call on Wednesday, but Algerians countered thatit had not been possible since, in its judgment, it had been imperative to act immediately.
The prime minister's spokesman said "the aim of the British government had been to work with the Algerian government and the company to resolve the situation peacefully".
According to two separate reports, many of the casualties were caused when an Algerian helicopter gunship opened fire on one of the jihadists' vehicles, which was carrying militants and hostages. It is not clear whether the vehicle was attempting to flee the scene at the time.
Even before the main Algerian army attack, the jihadists told al-Jazeera television that the army was firing on the complex, and a Japanese hostage reported he and a Norwegian hostage had been wounded by army snipers. Another hostage warned the "message does not seem to be getting through", al-Jazeera reported, and Algerian troops were continually firing at the camp.
The Signers in Blood militant group that attacked the gas field before dawn on Wednesday also called itself the Masked Brigade and owed allegiance to Mokhtar Belmokhtar, a one-eyed veteran jihadist who until last year was a deputy leader in al-Qaida in the Maghreb. He broke away from the group to start his own faction, pledging to fight western influence in the region. One of the hostage survivors said that members of the group spoke Arabic with Egyptian, Tunisian and Syrian accents.
"The terrorists told us at the very start that they would not hurt Muslims but were only interested in the Christians and infidels," another survivor, a 53-year-old local man called Abdelkader, told Reuters news agency. "We will kill them, they said." He added: "The terrorists seemed to know the base very well … moving around, showing that they knew where they were going."
The timing of the attack also suggested inside knowledge. The group struck when there was an unusually high number of foreigners at the gas field and some of them were leaving in a bus to the airport.