Gunmen have taken 170 people hostage inside the Radisson Blu Hotel in Mali's capital, Bamako.
The hotel chain said two armed men have locked in 140 guests and 30 employees.
The men came in a diplomatic vehicle Friday morning, firing as they entered the hotel, said witness Amadou Keita, who works at a cultural center close by.
The gunshots went on for several long minutes, he said.
Malian soldiers with help from U.N. troops have the hotel surrounded.
No group immediately claimed responsibility for the incident.
But the timing of the attack is troubling because it comes just a day after French President Francois Hollande praised his troops for successfully fighting Islamists in the African nation.
"France is leading this war with its armed forced, its soldiers, its courage. It must carry out this war with its allies, its partners giving us all the means available, as we did in Mali, as we are going to continue in Iraq, as we'll continue in Syria," he said.
Mali is a former French colony.
Olivier Saldago, a spokesman for MINUSMA, said the hotel was host to a large delegation for the peace process.
MINUSMA is the U.N. mission in the nation. The United Nations sent peacekeepers to Mali in 2013 to guard against militant Islamists who threatened to move on Bamako.
At least seven Chinese guests are among those held hostage, Chinese media reported.
China has been expanding its presence in Africa in recent years, investing and building large-scale infrastructure projects throughout the continent.
Many Chinese businesspeople also see opportunities in Africa and have been flocking there.
The U.S. Embassy in Mali asked American citizens and its staffers to remain indoors. The embassy, in a tweet, called it an "ongoing active shooter operation."
In August, 12 people -- including five Malian soldiers -- were killed in a hostage situation and ensuing battle at a hotel in Sevare in central Mali.
The soldiers stormed the hotel to end a daylong siege that started when gunmen raided the hotel after attacking a military site nearby, witnesses said.
In that incident, the attackers were affiliated with the Macina Liberation Movement.
Human Rights Watch has described the group as Islamists who commit "serious abuses in the course of military operations against Mali's security forces."
The Radisson Blu hotel is about 15 minutes from Bamako Senou International Airport
CNN's Margot Haddad in Paris and Elizabeth Joseph in Hong Kong contributed to this report.