A Mauritanian news agency that has been in constant contact with kidnappers holding dozens of Western hostages in Algeria reported on Thursday that 34 of the captives had been killed in air strikes.
It was not immediately possible to confirm the report by the ANI news agency, which said 14 kidnappers had also been killed in air strikes by the Algerian armed forces, which had surrounded the remote desert gas pumping station where the kidnappers were holed up.
Qatar-based Al Jazeera television carried a similar report, citing its own sources.
ANI quoted a spokesman for the kidnappers as saying they would kill the rest of their captives if the army approached.
Governments around the world were holding emergency meetings to respond to one of the biggest international hostage crises in decades, which sharply raised the stakes in a week-old French campaign against al Qaeda-linked rebels in the Sahara.
An Algerian security source earlier said 25 foreign hostages had escaped the besieged compound, including two Japanese.
The source told Reuters the captors had demanded safe passage out with their prisoners. Algeria has refused to negotiate with what it says is a band of about 20 fighters.
A group calling itself the ``Battalion of Blood'' says it seized 41 foreigners, including Americans, Japanese and Europeans, after storming the pumping station and employee barracks before dawn on Wednesday.
The attackers have demanded an end to the French military campaign in Mali, where hundreds of French paratroopers and marines are launching a ground offensive against rebels a week after Paris began firing on militants from the air.