The main militant group in Nigeria's troubled Niger Delta region says a government offensive launched against them was a botched attempt to rescue hostages the group is holding.

The Movement for the Emancipation for the Niger Delta (MEND) says Nigerian troops launched a major offensive Saturday using helicopter gunships, jet fighters and more than 20 gunboats and landing craft.

MEND claims the military embarked on the rescue attempt based on faulty intelligence. They claim the offensive razed two communities  - Elem Tombia and Ogboma - to the ground and that civilian casualties are high.

MEND says seven of its fighters were killed in the attack

A Nigerian military official confirmed a military engagement with the militants, but said it was in response to a rebel attack. He says the situation is under control and there are no casualties.

The group says it was holding 27 oil company workers they claim to have "rescued" Friday from pirates who had kidnapped them.   The militants say they had planned to use the oil workers as "reward leverage" for the release of MEND leader Henry Okah, who is currently being held by the government.

MEND says some of the oil workers were injured in today's fighting.

For much of the last two years, the Niger Delta has been the scene of violent unrest, much of it focused against the region's oil industry.  Kidnappings, pipeline sabotage and other violent attacks are common.

Many of the armed groups in the region say they are fighting for a greater share of the nation's oil wealth.  The inhabitants of the Delta remain desperately poor, despite the wealth pumped out of the region every day.

Other groups have targeted foreign companies, seizing workers in exchange for ransom. 

Some information for this report provided by AFP and Reuters.