The Al-Qaeda-linked gunmen, cited by Mauritania's ANI news agency, said they still held seven foreigners at the site deep in the Sahara near the border with Libya.
An Algerian security official put their number at 10, but more workers remain unaccounted for, including at least 10 Japanese and eight Norwegians.
"This is an extremely difficult and dangerous situation," US Secretary of State Hillary Clinton said at a joint Washington news conference with Japanese Foreign Minister Fumio Kishida as one American hostage was confirmed dead.
"The United States extends our condolences to all the families who have lost loved ones in this brutal assault and we remain deeply concerned about those who remain in danger. Utmost care must be taken to preserve innocent life."
State Department spokeswoman Victoria Nuland identified the dead American as Frederick Buttaccio amid reports that a total of five Americans were initially taken hostage on Wednesday.
The UN Security Council "condemned in the strongest terms the terrorist attack in In Amenas, Algeria," in a statement agreed by the 15-member panel.
It expressed "deep sympathy and sincere condolences to the victims of these heinous acts," and "underlined the need to bring perpetrators, organisers, financiers and sponsors of these reprehensible acts of terrorism to justice."
International criticism of Algeria's haste in launching military assault on Thursday to rescue hostages has mounted, after an Algerian security official said 12 hostages and 18 kidnappers were killed in the special forces operation.
Kishida urged Algeria to place the "utmost priority" on ensuring the remaining hostages' safety. Ten Japanese nationals remain unaccounted for.
French Foreign Minister Laurent Fabius said a Frenchman had been killed, and a US official said an American military aircraft had begun to help evacuate survivors, but gave no estimate of the number of US hostages.
Troops were trying to reach a "peaceful" end to the hostage crisis, before "neutralising the terrorist group that is holed up in the plant and freeing a group of hostages still being held there," an Algerian security official said.
The Al-Qaeda-linked gunmen group known as "Signatories in Blood" wants an end to French intervention in neighbouring Mali, Mauritania's ANI news agency quoted sources close to their leader, Mokhtar Belmokhtar, as saying.
The gunmen said they were still holding three Belgians, two Americans, one Japanese and a Briton, although Belgium said there was no indication that any of its nationals were being held.
ANI said Belmokhtar, a veteran Algerian extremist with Al-Qaeda ties who has claimed responsibility for the attack, proposed exchanging the remaining two US hostages for the Egyptian blind sheikh Omar Abdul Rahman and Pakistani Aafia Siddiqui, jailed in the United States on charges of terrorist links.
AFP
