Algerian forces have surrounded the gas field where 41 foreign workers are being held hostage by Al Qa-ida gunmen.
Algerian security officials said two people were killed in the attack on a natural-gas facility at In Amenas yesterday, some 800 miles south of the capital, Algiers, near the Libyan border.
The Algerian Interior Ministry said heavily armed gunmen in three vehicles attempted to ambush a bus carrying employees from the plant to the airport of In Amenas early yesterday morning but were driven off.
It said: "After their failed attempt, the terrorist group headed to the complex's living quarters and took a number of workers with foreign nationalities hostage."
Norwegians, French, Americans, Britons and Japanese are also believed to be among those kidnapped.
Militants have said the attack is in revenge for Algeria's support of France's intervention against rebels in Algeria's southern neighbour, Mali.
It is believed to have been led by the Algerian Islamist Mokhtar Belmokhtar.
Tanaiste Eamon Gilmore has called for the kidnap victim -- who was travelling on an Irish passport -- to be freed immediately.
He said: "The Government stands ready to use all the resources available to us to ensure that our citizen is released as soon as possible."
The Department of Foreign Affairs said that it was providing consular assistance to the family and was in close contact with its international partners in order to establish the facts of the situation.
The Algerian army has been engaged in an operation to recover the hostages. The attack comes as French ground forces are preparing to engage Islamist militants in Mali.
Algeria has been allowing French aircraft to use its air space to attack targets in Mali.
A news agency was contacted by the militant group Katibat Moulathamine -- "The Masked Ones" -- with a claim that the attack was carried out by one of its affiliates.
A spokesman for Katibat said that 41 Westerners of nine or 10 nationalities had been taken hostage, including seven Americans.