Malian officials said at least 12 people had died at Byblos Hotel, used by United Nations staff, in Sevare, around 600 km (400 miles) northeast of the west African nation's capital Bamako.
Mali's Minister of Security and Civil Protection, Général Sada Samaké said the attack began early on Friday (August 7) morning when gunmen burned a vehicle close to UN staff, outside the hotel, and then shot at them. After visiting the site he said investigators found one burned body inside.
After seizing the hotel the assailants held off government troops who quickly surrounded the building.
Malian forces had used heavy weapons, including rocket-propelled grenades, on Friday in a failed attempt to dislodge the gunmen that then gave way to the prolonged stand-off.
The resident and a Malian military source said a special unit of the Malian gendarmes had carried out Saturday's raid.
The defence ministry said French forces had backed the operation. But a French army spokesman said French soldiers had not been directly involved in the assault on the hotel.
The attack was the latest in what appears to be a growing campaign against Malian soldiers and UN personnel by remnants of an al Qaeda-linked insurgency along with newly formed local Islamist groups.
Military spokesman Colonel Souleymane Maiga said early suspicions indicated the Massina Liberation Front, whose members are mainly drawn from central Mali's ethnic Peul community, had likely carried out the hotel attack.
In a press release Mali's UN peacekeeping mission, MINUSMA, said four UN contractors - two from South Africa along with a Russian and a Ukrainian - had been freed in the pre-dawn raid by security forces.
Samaké, confirmed the nationalities of some of the UN contractors saying the attack had been brazenly violent. He appealed to residents to share information about insurgents and told them to remain vigilant.
MINUSMA said five staff associated with the mission had died, a Nepalese, a South African, two Ukrainians and a Malian.
South Africa's Foreign Ministry confirmed two of its citizens were safe while a 38-year-old Pretoria resident working for an aviation company contracted to MINUSMA had died.
Malian military and government officials had earlier said three hostages from South Africa, Russia and Ukraine had died. Ukraine's foreign ministry also said in a statement one of its citizens was believed dead while three others escaped or were freed.
Seven suspects have been arrested in connection with the attack, according to a government statement released late on Friday.
A 2013 French-led military operation drove back Islamist fighters, who had taken advantage of an ethnic Tuareg rebellion and a military coup to seize territory in the north a year earlier.
While the United Nations has managed to broker a tenuous peace agreement between the government and Tuareg separatists, Islamist fighters left out of the negotiations have mounted an insurgency.
Former colonial ruler France and other Western and regional nations fear Islamist fighters could turn the remote region into a launch pad for attacks further afield if they regain power there.
