Updated at 4:35 p.m. ET
ALGIERS, Algeria In what could be the first spillover from France's intervention in Mali, Islamist militants attacked and occupied a natural gas complex partly operated by energy company BP in southern Algeria on Wednesday. Two foreigners were killed and dozens of others, including at least three Americans, were taken hostage.
Source tell CBS News' Pat Milton that the attack appears to have been planned. It looks like they targeted the compound. Al Qaeda in the Islamic Magreb, an affiliate of the international group, is the suspect, but not confirmed.
Source said there was an explosion at the compound, a fire fight and a bus seized. The hostages were not believed to have been armed. It is unclear if the bus was used to transport the hostages.
Secretary of State Hillary Clinton has discussed the attack with Algeria's prime minister, and the United States is working with Algerian authorities,
Both Nuland and Defense Secretary Leon Panetta said the United States strongly condemned the attack, which they called an act of terrorism, CBS Radio News correspondent Cami McCormick reports.
Panetta likened the attack to al Qaeda activities in Pakistan, Afghanistan and in the United States on 9/11.
"It is a very serious matter when Americans are taken hostage along with others," Panetta told reporters in Rome, where he spent the day meeting with Italian leaders, in part to discuss the operations in Mali. "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."
Panetta would not detail what such steps might be.
A militant group claimed responsibility for the attack, saying it was in revenge for Algeria's support of France's operation against al Qaeda-linked Malian rebels groups far to the southeast. It said it was holding 41 foreigners, including seven Americans, but the United States hasn't confirmed those numbers.
Algerian forces have surrounded the complex and the state news agency reported a bit more than 20 people were being held, including Americans, Britons, Norwegians, French and Japanese, citing the local authorities.
"Algeria will not respond to terrorist demands and rejects all negotiations," Interior Minister Daho Ould Kablia said on television. He denied that the militants were from Mali or Libya, possibly suggesting they were from Algeria itself.
In a statement, BP said the site was "attacked and occupied by a group of unidentified armed people," and some of its personnel are believed to be "held by the occupiers."
Ireland announced that a 36-year-old married Irish man was among them, while Japan and Britain said their citizens were involved as well. A Norwegian woman said her husband called her saying he had been taken hostage.
In addition to those killed one of them a Briton six were wounded in the attack, including two foreigners, two police officers and two security agents, the state news agency reported.
Hundreds of Algerians work at the plant and were taken in the attack, but the state news agency reported that they have gradually been released in small groups, unharmed by the late afternoon.
A group called the Katibat Moulathamine, or the Masked Brigade, called a Mauritanian news outlet to say one of its affiliates had carried out the operation on the Ain Amenas gas field, taking 41 hostages from nine or 10 different nationalities, including the seven Americans.
The group's claim could not be independently substantiated.
The caller to the Nouakchott Information Agency, which often carries announcements from extremist groups, did not give any further details, except to say that the kidnapping was carried out by "Those Who Signed in Blood," a group created to attack the countries participating in the offensive against Islamist groups in Mali.
The Masked Brigade was formed by al Qaeda's longtime strongman in the Sahara region, Moktar Belmoktar, a one-eyed Algerian who recently declared he was leaving the terror network's Algerian branch, Al Qaeda in the Islamic Maghreb for his own group.
He said at the time he would still maintain ties with the central organization based out of Afghanistan and Pakistan.
French President Francois Hollande launched the surprise operation in its former West African colony on Friday, with hopes of stopping al Qaeda-linked and other Islamist extremists he believes pose a danger to the world.
Wednesday's attack began with the ambush of a bus carrying employees from the gas plant to the nearby airport but the attackers were driven off, according to the Algerian government, which said three vehicles of heavily armed men were involved.
"After their failed attempt, the terrorist group headed to the complex's living quarters and took a number of workers with foreign nationalities hostage," said the statement.
Attacks on oil-rich Algeria's hydrocarbon facilities are very rare, despite decades of fighting an Islamist insurgency, mostly in the north of the country.
In the last several years, however, al Qaeda's influence in the poorly patrolled desert wastes of southern Algeria and northern Mali and Niger has grown and it operates smuggling and kidnapping networks throughout the area. Militant groups that seized control of northern Mali already hold seven French hostages as well as four Algerian diplomats.
The natural gas field where the attack occurred, however, is more than 600 miles from the Mali border, though it is just 60 miles from Libya's deserts.
BP, together with Norwegian company Statoil and the Algerian state oil company, Sonatrach, operate the gas field. A Japanese company, JGC Corp, provides services for the facility as well.
Prime Minister David Cameron's office said "several British nationals" are involved in the "ongoing incident," without giving an exact number.
Japanese Chief Cabinet Secretary Yoshihide Suga said the kidnapped foreigners possibly include Japanese employees of JGC.
"We are certain that JGC is the one affected," Suga said, adding that the government is now negotiating with local officials through diplomatic channels, asking to protect the lives of the Japanese nationals.
Japanese news agencies, citing unnamed government officials have said there are three Japanese hostages.
Statoil spokesman Lars Christian Bacher said the company had 13 Norwegian employees and a Canadian on the site and two of them have suffered minor injuries, but he would not comment about the situation of the others.
The Norwegian Newspaper Bergens Tidende, however, said a 55-year-old Norwegian working on the site called his wife to say he had been abducted.
Algeria had long warned against military intervention against the rebels in northern Mali, fearing the violence could spill over its own long and porous border. Though its position softened slightly after Hollande visited Algiers in December, Algerian authorities remain skeptical about the operation and worried about its consequences on the region.
Algeria is Africa's biggest country, and has been an ally of the U.S. and France in fighting terrorism for years. But its relationship with France has been fraught with lingering resentment over colonialism and the bloody war for independence that left Algeria a free country 50 years ago.
Algeria's strong security forces have struggled for years against Islamist extremists, and have in recent years managed to nearly snuff out violence by al Qaeda in the Islamic Maghreb around its home base in northern Algeria. In the meantime, AQIM moved its focus southward.
AQIM has made tens of millions of dollars off kidnapping in the region, abducting Algerian businessmen or political figures, and sometimes foreigners, for ransom.