Algerian forces launched their rescue mission fearing an "immediate threat" to the hostages, David Cameron has told the House of Commons.
The attempt to rescue gas workers taken hostage by al Qaeda-linked militants ended in a number of deaths, including one Briton.
The Prime Minister put off a high-profile speech on Europe to stay in London and oversee developments.
After chairing a meeting of the Cobra emergency committee, he told MPs that the situation in Algeria was "continuing" but he hoped it would be resolved shortly.
He said the attack on the complex was "large, well co-ordinated and heavily armed" and appeared to be pre-planned.
A satellite image shows the scale of the sprawling gas complexOn Thursday night, fewer than 30 British citizens were believed to be "at risk" in Algeria. That number has now been "quite significantly reduced", Mr Cameron said.
Meanwhile Scotland's First Minister Alex Salmond said a number of Scottish residents who had been held captive have been confirmed as "safe and well".
A British plane carrying a "diplomatic team" has arrived in Algeria around 280 miles from the hostage scene.
Foreign Secretary William Hague has cut short a visit to Australia to return to the UK.
Before leaving, he said: "The responsibility for the tragic events of the last two days squarely rests with terrorists who chose to attack innocent workers, murdering some and holding others hostage."
The In Amenas facility is close to the border with LibyaForeign Office officials believe hostage takers could still be on the site.
Sky's Sophy Ridge said: "There has been perhaps an assumption … that this is a now just a search operation but certainly that's not the basis that the Foreign Office in the UK is working on."
The rescue attempt was launched early on Thursday without consultation with the UK. Mr Cameron was only informed it was under way when he spoke to the Algerian prime minister.
Algerian communications minister Mohamed Said Belaid said the military operation succeeded in "neutralising a large number of terrorists and freeing a large number of hostages".
He added: "But unfortunately, we are sorry to say, there were some deaths and injuries.
"We do not yet have a definitive figure. As soon as we have it, we will make it public."
One British citizen has already been confirmed dead earlier in the hostage situation.
Among those confirmed freed include Irishman Stephen McFaul and three Japanese workers.
The militant group believed to have carried out the raid on the In Amenas gas plant - Katibat Moulathamine or The Masked Ones - said it was retaliating for French military intervention against al Qaeda-backed rebels in neighbouring Mali.
The attack began on Wednesday morning when heavily-armed militants launched a dawn raid.
They claimed to have seized dozens of foreign workers, including Britons, Americans, Norwegians and Japanese.
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