French troops battled militants in Mali Wednesday in a war that escalated as Al-Qaeda-linked fighters killed two people in neighbouring Algeria and claimed to have taken 41 foreigners hostage in retaliation for France's "crusade".

After days of airstrikes on militants' positions in the northern territory the rebels seized in April, French and Malian ground forces battled the insurgents in the central towns of Diabaly and Konna, north of the capital, Bamako.

In a dramatic development over the border in Algeria, militants attacked a gas field and claimed to hold 41 foreign hostages, including seven Americans, after an attack on a gas field in the country's east.

"Forty-one Westerners including seven Americans, French, British and Japanese citizens have been taken hostage," a spokesman for the militants told the Mauritanian News Agency and Sahara Media.

Algerian Interior Minister Dahou Ould Kablia said that one Briton and an Algerian were killed in the attack.

He said six people were wounded -- another Briton, a Norwegian and a Scot, as well as an Algerian security agent and two policemen.

An Algerian lawmaker said one French national and four Japanese were taken hostage.

Dublin confirmed the kidnapping of an Irish national while the US state department said several of its nationals were among the hostages.

A Norwegian man was also reported seized, while a French news channel said it had spoken with a Frenchman being held hostage who reported that Malaysian and Filipino nationals were also among the group.

Various statements by militants have been made since the attack. One militant told AFP the kidnappers belonged to a group run by former Al-Qaeda in the Islamic Maghreb (AQIM) leader Mokhtar Belmokhtar.

"We are members of Al-Qaeda and we came from northern Mali," he told AFP by telephone.

A statement by a group calling itself "Signatories For Blood" said the attack was a reprisal for "the crusade being waged by French forces in Mali".

"We hold Algeria and the hostages' countries responsible for any delay in meeting our conditions, the first of which is a halt to this aggression against our people in Mali," said the statement on Mauritanian website Alakhbar, which often carries material from militants.

The extremists demanded the release of 100 Islamists held in Algeria in exchange for their hostages, a worker at the gas field site told AFP.

The attack was the first reprisal by the Islamists for the French assault that began on January 11. It comes after Algeria threw its support behind the Mali offensive and opened its airspace to French fighter jets.

The French defence ministry warned of an "intensified" threat of attack and kidnapping in the Sahel. The country has already boosted security on home soil after threats of reprisals.

As the offensive in Mali continued, the country's interim president Dioncounda Traore visited French troops in Bamako, vowing: "Together we will win the war" against "the darkness threatening the entire world."

French troops waged a ground battle Wednesday in Diabaly, a town seized two days earlier by fighters led by Algerian Abou Zeid, one of the leaders of AQIM.

"The special forces are currently in Diabaly, in close-quarter combat with the Islamists. The Malian army is also in place," a Malian security source said on condition of anonymity.

Clashes also took place not far from the town of Konna, whose seizure last week prompted the French intervention, security sources said.

The French military said it had secured a strategic bridge on the Niger river near the town of Markala, south of Diabaly, blocking a key route to Bamako.

French Defence Minister Jean-Yves Le Drian said the western zone where Diabaly lies was home to "the toughest, most fanatical and best-organised groups. It's under way there but it's difficult."

-- ICC launches Mali war crimes probe --

As rights groups and military sources bemoaned the deployment of child soldiers and use of locals as human shields, the Hague-based International Criminal Court said it had launched a war crimes probe targeting the rebels.

"Different armed groups have caused havoc and human suffering through a range of alleged acts of extreme violence," chief prosecutor Fatou Bensouda said in a statement.

"I have determined that some of these deeds of brutality and destruction may constitute war crimes."

In Washington, the White House said it was closely monitoring developments in Algeria.

The US confirmed American citizens were among the hostages. British Foreign Secretary William Hague also confirmed some British nationals were being held and said Britain was working "very closely at all levels" with Algeria.

Jointly operated by British oil giant BP, Norway's Statoil and state-run Algerian energy firm Sonatrach, the gas field is located 1,300 kilometres (810 miles) southeast of Algiers, close to the Libyan border.

"We are... in touch with the Algerians and our other partners in the region," National Security Council spokesman Tommy Vietor told AFP.

With its own nationals now implicated in the Mali crisis, the US assured France that it had the support of the international community.

"The UN, in confirming that these steps should be taken, I think made clear that the international community should do what we need to do in order to confront AQIM," Defence Secretary Leon Panetta said in Italy.

In France, a poll released Wednesday said 66 percent of French support the intervention -- nine percent less than a separate poll published the day before.

As offers of non-military support for the Mali assault continued to pour in -- with Germany pledging two transport planes and Italy logistical support -- Ivory Coast's leader Alassane Ouattara urged all European partners to "mobilise".

A first contingent of 190 Nigerian troops was due in Bamako as part of a regional force of over 3,000 soldiers from West African nations. A further 2,000 men will arrive within the next 10 days, according to a report from a meeting of regional army chiefs seen by AFP.

France says it will ultimately send 2,500 troops, pitted against some 1,300 Islamic fighters.

Mali has been effectively split in two since April 2012, when Islamists took advantage of a military coup in Bamako and an offensive launched by Tuareg separatists in the north to seize half the country.

The UN and aid agencies report some 370,000 Malians have been displaced by the fighting.