Armed Islamists said Wednesday they are holding 41 hostages at an Algerian gas field after killing two foreigners in an attack carried out to avenge Algerian support for French military intervention in Mali.

"Forty-one Westerners including seven Americans, (as well as) French, British and Japanese citizens have been taken hostage," the Islamists told the Mauritanian News Agency as well as Sahara Media.

Algeria's APS news agency gave a toll of two people killed, including a Briton, and six injured in the dawn attack in southern Algeria.

It did not identify the nationality of the other person killed.

Britain's Foreign Office was unable confirm that a Briton died in the attack, which took place near the In Amenas gas field, close to the Libyan border, saying only that "British nationals are caught up in this incident."

The gas field is jointly operated by British oil giant BP, Norway's Statoil and state-run Algerian energy firm Sonatrach.

Production was shut down after the attack.

"We can confirm that there is an ongoing security incident at the In Amenas gas field," BP said late Wednesday.

"The site was attacked and occupied by a group of unidentified armed people at about (0500 GMT). Contact with the site is extremely difficult, but we understand that armed individuals are still occupying the In Amenas operations site".

"Our absolute priority is the safety and security of our staff," BP added, saying "we do not yet have confirmed information on the status of personnel at the site but believe some are being held by the occupiers."

Earlier, Algeria's interior ministry said the Islamist attackers, after being repelled by security units escorting the bus to In Amenas airport, headed to the oil workers' base, taking an unknown number of workers hostage.

Japanese engineering firm JGC said five Japanese workers were believed to have been seized in the raid, while separate sources said a Frenchmen, an Irish citizen and a Norwegian were among those taken hostage.

One of the attackers told AFP by telephone that they were Al-Qaeda loyalists who had slipped into Algeria from northern Mali where France launched a major offensive against the jihadists on January 11 to prevent them from advancing on the capital Bamako.

"We are members of Al-Qaeda and we came from northern Mali," the militant told AFP by telephone.

"We belong to the Khaled Abul Abbas Brigade (better known as Mokhtar Belmokhtar)," he added.

The kidnapping was claimed by a group recently formed by Mokthar Belmokhtar, a notorious one-eyed jihadist nicknamed "The Uncatchable", who has been sentenced to life imprisonment in absentia on several occasions in his home country Algeria.

According to the Islamist spokesman who did not give his name to the two Mauritanian media outlets, the attack was "a reaction to Algeria's flagrant interference in allowing French planes into its airspace to launch raids on northern Mali."

He called Algeria's attitude "a betrayal for the blood of Algerian martyrs slain by the French colonists."

He said five of the hostages were being held at the gas plant, while the others were in a housing complex on the site.

On Tuesday, Algeria announced it had closed its border with Mali, following the French offensive against Al-Qaeda in its southern neighbour, but the 2,000 kilometre (1,200 mile) desert frontier is almost impossible to seal.

On Saturday, the Algerian foreign ministry expressed its "unequivocal support" for the transitional authorities in Mali.

A day later, French Foreign Minister Laurent Fabius said Algeria had authorised the over flights of Rafale fighter jets based in France to take part in the operation in Mali.

Many of the fighters and weapons in Mali were displaced from Libya after the 2011 armed uprising that overthrew veteran dictator Moamer Kadhafi.