Defense Secretary Leon Panetta
ALGIERS, Algeria (AP) -- There's a desert standoff deep in the Sahara.
The Algerian army has surrounded a natural gas complex where Islamist militants are hunkered down with dozens of hostages after a rare attack that appeared to be the first violent shock wave from the French intervention in Mali.
A militant group that's claimed responsibility says 41 foreigners, including seven Americans, are being held.
An Algerian official says one Briton and one Algerian were killed in the attack, while a Norwegian and two other Britons were among six wounded.
The militants say the attack was in revenge for Algeria's support of France's military operation against al-Qaida-linked rebels in neighboring Mali.
The militants appear to have no escape, with troops surrounding the complex and army helicopters overhead.
Defense Secretary Leon Panetta says the U.S. "will take all necessary and proper steps" to deal with the attack. He has not detailed what such steps might be, but condemned the action as a "terrorist attack." He likened it to al-Qaida activities in Pakistan, Afghanistan and in the United States on Sept. 11, 2001.