Update 3:56 p.m.: Algerian state TV reports some Algerian hostages have been released, though it's unclear how or why right now. All foreign hostages are still being held, including the Americans. Algeria's Interior Minister received demands from the attackers, but he told media the country has no intention of negotiating with terrorists. 

Update 2:33 p.m.: The number of Americans held is now being disputed. U.S. officials reportedly told NBC News there are three Americans being held, though Defense Secretary Leon Panetta confirmed that American hostages were being held and called the hostage situation a terrorist attack.

Update: 1:23 p.m.: In a State Department press briefing, the Department reported they have confirmed Americans are "among the hostages" being held by Al Queda. Secretary of State Hillary Clinton has been in contact with the U.S. ambassador to Algeria, but that was all the new information given.

Original post: A group of al-Qaeda militants snuck over the border from Mali into Algeria on Wednesday morning and claims to have taken 41 hostages from a gas production facility, including seven Americans. Earlier reports were that one person was killed and a handful of foreign citizens were kidnapped, but the situation appears to have become larger and more serious than previously imagined.

The group attacked the Amenas gas facility in southern Algeria, which is a joint operation between Algeria's state oil company, a Norwegian firm, and BP. The latest reports indicate that two people were killed, including a British and a French citizen, and as many 41 foreign nationals were kidnapped, including French, British, Japanese, Norwegian, Irish, and American citizens. The militants may have hijacked a bus carrying workers to the facility. BP only confirmed that there was a "security incident' at the facility, but would not release any other details.

The militant group that claimed responsibility, calls itself Katibat Moulathamine (the Masked Brigade) and claims to be linked to al-Qaeda and the Islamic Maghreb fighters who have seized control of Northern Mali and carried out other operations in the Sahara Desert. French military forces descended on Mali this week to stop the advance of the Islamic militants that have threatened to overthrow Mali's interim government. In response, the Islamists have threatened to take action against French citizens in Africa, and even to strike out within France itself. French security services have been placed on high alert, particularly at tourist destinations and other high-profile targets in Paris.