Algeria has informed France that a French citizen was killed in the hostage rescue operation at a remote gas plant seized by Islamist militants, French Foreign Minister Laurent Fabius said Friday.

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"One of our countrymen, Yann Desjeux, has unfortunately lost his life. Three other of our citizens, who were also at the site during the attack by the terrorists, were saved," Fabius said.

On behalf of the government, Fabius extended his condolences to the Desjeux family and the families of all those who have died in the brazen hostage-taking.

A security source in Algeria earlier said that 12 hostages have been killed since the Algerian army launched its operation against the Al Qaeda-linked hostage-takers at the In Amenas gas field in the Sahara.

The gunmen have demanded negotiations to end France's military intervention in neighbouring Mali against Islamist rebels as well as a swap of US hostages for Islamist prisoners held in the United States, Mauritania's ANI news agency reported.

France later confirmed that no more of its nationals were being held hostage in Algeria by Islamist gunmen holed up with an unknown number of foreign captives at a desert gas plant.

Defence Minister Jean-Yves Le Drian confirmed that one Frenchman had been killed in the attack and that other French nationals taken hostage had been
freed.