A Ukrainian man who managed to escape the hotel in Sevare said there were about 10 hostages with at least 10 gunmen inside. He said he had been kept in a room with two armed guards before escaping Friday night.
Malian military officials said the hostages included locals and Westerners.
At least four soldiers and one foreigner were killed, said an army spokesman, Col. Souleymane Maiga. He said three attackers were killed and five soldiers were wounded.
The United Nations mission in Mali, MINUSMA
, said available reports indicate a foreign staffer with MINUSMA was also killed.
The attack began early Friday when armed men attacked a military site in Sevare, about 385 miles northeast of Bamako, MINUSMA said
. Malian armed forces pushed back the attackers, who then sought refuge in the hotel, the U.N. mission said.
It was 7:20 a.m. (3:20 a.m. ET) when the attack on the hotel began, said Oumar Arby, who lives a couple of miles from the hotel.
"The gunmen attacked the hotel with AK-47s and launched rockets while they yelled, 'Allahu Akbar,'" Arby said.
Soldiers from a military camp arrived and surrounded the hotel.
"I heard gunshots and heavy explosions," Arby said. "The fighting continued in the street and around the hotel. At one point, the Islamists retreated to the hotel and fired at the soldiers from inside."
The fighting stopped around 3 p.m., he said, with the soldiers firing occasional warning shots, but the gunfire resumed just before the evening prayer at 7 p.m.
A couple of hours later, Arby said he could still hear gunshots, but "the streets are empty. No one dares leave their house."
The soldiers at the hotel were "only monitoring the situation for now," Maiga said.
Militant Islamist threat
Malian special forces are now in Sevare, Maiga said, and MINUSMA said its own police experts were on hand to offer technical support.
Citing information from an army commander in Sevare, Maiga said the attackers are affiliated with the Macina Liberation Movement.
Human Rights Watch mentioned the group in April,
calling it an Islamist armed group operating in the central part of Mali that "has committed serious abuses in the course of military operations against Mali's security forces."
It said the group has burned local government buildings, downed a communication tower, and threatened the local population with death if they collaborate with French forces, the government or the U.N. peacekeeping mission.
The United Nations sent peacekeepers to Mali in April 2013
to guard against militant Islamists who threatened to move on the West African nation's capital, Bamako.