Late last night the hijackers opened the rear door of the aircraft, fired a warning shot and dumped a body on to the runway. An airport ambulance was allowed on to the runway to retrieve the body.
There were earlier unconfirmed reports that the hijackers had threatened to murder a French national unless the plane took off by 9.30pm local time.
The five gunmen, disguised as airport workers, seized the Air France aircraft on Saturday evening as it was preparing to take off for Paris. Shortly afterwards, they shot two passengers, an Algerian policeman and a Vietnamese diplomat, and threw out their bodies.
By late last night, they had released all children and 66 women passengers but the fate of the others remained uncertain. The French government had earlier indicated that it might be prepared to allow the Airbus to fly to France.
According to another report, however, Paris had moved elite anti-terrorist police to the island of Majorca ready to intervene.
The hijackers, who evidently timed their action for maximum global attention, demanded the release of two leaders of the banned Islamic Salvation Front (FIS). They also asked for the plane to be readied for an unknown destination. Initially, they called
for the release from house arrest of Abassi Madani and Ali Belhadj by 10am yesterday morning. As the deadline passed, however, they dropped the demand.
Edouard Balladur, France's Prime Minister, interrupted his Christmas weekend in the Alpine resort of Chamonix to return to Paris for an meeting with his defence, foreign and interior ministers and the chief of staff of the armed forces.
He said earlier that France was prepared to help Algeria to end the hijacking. Foreign Minister Alain Juppe, said anti-terrorist units were on alert.
"The hostages are our primary concern," Mr Juppe said. Asked if the plane could be allowed to fly to France, he said he did not want "to commit myself to hypotheses but we are ready to consider any initiative allowing a solution to the drama".
According to Algerian officials, 161 passengers and 12 crew were still on the Airbus last night. Most of the passengers were Algerian and about 40 were French. Algerian authorities said they had identified four of the five hijackers, who boarded the plane dressed as Air Algerie ground staff.
They were led by Abdul Abdallah Yahia and were members of the Armed Islamic Group (GIA), the most violent of the clandestine fundamentalist groups waging war on the military-backed Algerian government.
When Yahia's mother tried to negotiate by radio from the airport control tower, the response was a burst of automatic fire in the direction of the tower.
The GIA has admitted responsibility for most of the 71 assassinations of foreign residents since it started a campaign to drive foreigners out in September 1993. Some 11,000 Algerians are estimated to have died in the three years of conflict.
Passengers who were released said the gunmen, carrying at least two Kalashnikov rifles and two other automatic weapons, and distributed blankets and headscarves to women so they could cover their heads in conformity with Islamic tradition.
One of the freed women said the Algerian who was killed, reported to be a police officer, shouted: "Don't kill me! I am married, I have a child." The unidentified Vietnamese, reported to be a diplomat, was shot shortly afterwards.
Unholy war, page 5