An oil installation on the outskirts of In Amenas, deep in the Sahara near the Libyan border/AFP
The heavily armed gunmen from a group known as “Signatories in Blood” had been holed up in the In Amenas gas complex since they took up to 41 foreign workers hostage in a dawn assault on Wednesday.
“The (army) assault took place mid-morning. Eleven terrorists lost their lives along with the foreign hostages,” the security source told AFP.
The gunmen, cited by Mauritania’s ANI news agency, said on Saturday they were still holding “seven foreign hostages,” denying claims of more.
“Signatories in Blood,” led by Algerian Mokhtar Belmokhtar, a former senior Al-Qaeda commander in north Africa, were demanding an end to French intervention against Islamists in neighbouring Mali, ANI reported earlier.
Belmokhtar also wanted to exchange American hostages for the blind Egyptian sheikh Omar Abdul Rahman and Pakistani Aafia Siddiqui, jailed in the United States on charges of terrorist links.
But State Department spokeswoman Victoria Nuland said “the United States does not negotiate with terrorists.”
On Friday, an Algerian security official had said troops were trying to reach a “peaceful” end to the crisis, before “neutralising the terrorist group that is holed up in the plant and freeing a group of hostages still being held there.”
Amid a virtual news blackout in Algiers, harshly criticised by local media, world leaders took a tough stand on the fate of the remaining hostages.
US Defence Secretary Leon Panetta said Washington would “take all necessary steps to protect our people” from the threat of Al-Qaeda-affiliated militants in north Africa.
“Whether or not that involves assisting others with military operations, whether it involves developing in a cooperative way operations there, those are areas that I think remain to be decided,” he told the BBC.
Earlier, US Secretary of State Hillary Clinton told a news conference with Japanese Foreign Minister Fumio Kishida of her deep concern “about those who remain in danger. Utmost care must be taken to preserve innocent life.”
At least one American had already been confirmed dead before Saturday’s final assault.
On Friday, the militants gave a breakdown of three Belgians, two Americans, one Japanese and a Briton, although Belgium said there was no indication any of its nationals were being held.
An Algerian security official had put the remaining number of foreign hostages at 10.
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