A group linked to al Qaeda is said to have taken hostage up to 41 westerners at a gas plant in eastern Algeria.
Reports say there are claims it is in retaliation for the military intervention in Mali.
The workers were reportedly leaving the installation in a bus when they were targeted.
The attackers are reported to have killed three people including a Briton and a French national. Six or seven others are said to have been wounded.
The hostages are thought to have several different nationalities and include seven Americans. They are being held at the plant, which is surrounded by the Algerian army.
The installation is jointly run by BP, the Norwegian firm Statoil and the Algerian state company Sonatrach.