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SANAA, Yemen (CNN) -- A standoff between Yemeni government troops and rebels holding 16 Westerners hostage ended in a shootout Tuesday. At least four hostages were killed.

Information out of Yemen was sketchy and conflicting. A spokesman for the British Home Office described the situation as "chaotic" and "confusing."

A Yemeni official said four Britons, two men and two women, were killed in the rescue attempt. But British Foreign Secretary Robin Cook said he was told three of the dead were British and one was Australian.

One Briton and one American were reportedly wounded during an attempt to rescue the hostages. Neither was said to have suffered life-threatening injuries.

A Yemeni security official said three kidnappers were killed and three others were injured in the raid. An unknown number of kidnappers were arrested.

Troops stormed the hideout after receiving reports that the kidnappers had begun killing their hostages, the official said.

"They killed two," he said, "and then our forces stormed them to prevent an escalation of the situation and the killing of more hostages."

Police said a splinter group of Islamic Jihad kidnapped the tourists Monday near the southern town of Mawdiyah, about 200 kilometers (175 miles) south of the capital, Sanaa.

The group was demanding the release of its leader, Saleh Haidara al-Atwi, who was arrested two weeks ago in a government crackdown on Islamic extremists.

Yemeni officials had begun negotiations with the kidnappers for the hostages' release earlier Tuesday.

The abduction was reportedly the first in Yemen by Islamic militants. Yemeni tribesmen frequently kidnap tourists, who are usually released unharmed, to demand government concessions such as new roads, water supplies or clinics.

The frequent kidnappings have threatened Yemen's tourism industry, which generated more than $100 million for the poor Arab state last year. Tribesmen have been holding four German tourists, three of them women, since December 6, demanding money, luxury cars and government jobs.

The Islamic group that claimed responsibility for Monday's kidnapping promotes enforcement of strict Islamic law. It has about 200 members and runs a military camp in southern Yemen.

Reuters contributed to this report.