Algerian troops have launched a military operation against Islamist terrorists holding dozens of hostages at a gas facility near the Libyan border, the UK foreign office has confirmed.

British PM David Cameron has been informed about developments in a phone call from his Algerian counterpart, Abdelmalek Sellal,a foreign office spokesperson told IBTimes UK. British nationals are confirmed as being among the hostages.

Conflicting reports are emerging as to the result of the strike. Local news agency APS claims four hostages, two Scots, a Kenyan and a French, have been free by the Algerian army during the raid.

However another news agency, Mauritania's ANI, earlier reported that 34 hostages and 14 militants were killed in a helicopter airstrike by Algerian troops.

ANI reportedly spoke on the phone to one of the hostage takers, who also said that the terrorists' leader, former al-Qaida in the Islamic Maghreb (AQIM) member Mokhtar Belmokhtar, was killed in the raid.

The Islamist told ANI seven hostages, among them a British national, remain in the terrorists' hands.

The others are reportedly two Americans, three Belgians and one Japanese, but the information has yet to be independently confirmed.

According to another local source, cited by Reuters, six foreign hostages and eight kidnappers were killed by the Algerian strike as they were leaving the gas plant in a vehicle.

Earlier in the morning, at least 15 foreign and 30 local workers held hostage at the BP gas facility managed to escape. However the UK foreign office could not confirm if any Briton was among them.

Up to 41 foreign workers and about 100 Algerians had been taken captive by Islamic militants, according to initial reports.

A Briton and an Algerian were killed in the initial raid when militant group Katibat Moulathamine, or the Masked Brigade, raided the Tigantourine gas plant on Wednesday.

Algerian troops later surrounded the gas facility located about 40km (25 miles) south-west of In Amenas, near to the Libyan border.

The plant is run by BP, Norway's Statoil and the Algerian state-owned oil company, Sonatrach.