Malian commandoes have freed 80 hostages at the Radisson Blu Hotel in country’s capital, Bamako, a state media quoted by Al Jazeera has said.
The hotel management said 138 people still remained inside.
The gunmen stormed the hotel, which is popular with diplomats, foreign business executives and airline crews, shooting and shouting “God is great!” in Arabic.
Three people have been shot dead and two soldiers wounded, officials say.
Malian Interior Minister Salif Traore said the injuries sustained by the soldiers were not life threatening.
The US Department of Defense said US special forces were involved in the hostage recovery efforts.
“US forces have helped move civilians to secured locations,” a spokeswoman said.
The French government has also announced that it is flying in commandos from France to help in the rescue efforts.
The hotel has set up special phone lines for families of some the hostages.
Air France says 12 of its crew had been successfully freed in the rescue operation; Turkish Airlines says five of its crew were also out of the hotel, but two still remained inside.
The Indian embassy says 20 of its nationals were in the hotel, but were in a safe location.
CCTV, Chinese state TV reported that 10 Chinese, who were previously caught up in the hotel, had been freed.
According to UN peacekeeping force in Mali, who are also helping in the operation, Malian special forces freed hostages “floor by floor”.
“We have sealed all the exit points of the hotel, so be assured none of the hostage-takers will be able to escape,” the interior minister told reporters outside the hotel.
“I don’t know where to go. I’m tired and in a state of shock,” Monique Kouame Affoue Ekonde, an Ivorian guest told the AP news agency.
Earlier, it was reported that the gunmen were freeing people who could recite the Koran.
“They were in car with a diplomatic licence plate. They were masked. At the gate of the hotel, the guard stopped them and they start firing. We fled,” an hotel gardener told the BBC.
Mali’s President Ibrahim Boubacar Keita has cut short a trip to a summit in Chad.
The French president, Francois Hollande, said, “We should yet again stand firm and show our solidarity with a friendly country, Mali”.
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