The Islamic extremists also planned to blow up the gas installation and rigged it with mines throughout, the U.S. official said.
Thursday's military incursion succeeded in freeing some hostages -- but not all.
Some survivors described their harrowing escapes by rigging up disguises and sneaking to safety with locals, with at least one survivor running for his life with plastic explosives strapped around his neck.
Several hostages died. And the Algerian military came under criticism from some quarters for unnecessarily endangering hostages' lives.
Undeterred, the government followed with a second push Saturday. That assault killed the remaining hostage-takers but resulted in more hostage deaths.
The army intervened "to avoid a bloody turning point of events in this extremely dangerous situation," the Algerian Interior Ministry said Saturday.
"It was clear that the terrorists were determined to escape the country with the captives and to bomb the gas installations."
On Sunday, an American lawmaker said the Algerian government turned down U.S. offers to help during the crisis.
"They decided they were going to handle it their way," said Rep. Mike Rogers, a Michigan Republican who is chairman of the U.S. House Intelligence Committee. "They did not want us or the other hostage nations involved in the decision-making."
British Defense Secretary Philip Hammond called the loss of life "appalling and unacceptable," while laying blame solely on the terrorists.
Countries mourn dead, try to track down missing
While the military part of the operation is over, the searching and mourning is not for people in countries worldwide. In addition to combing the sprawling desert site, Algerian forces are searching hospitals and medical centers around the country, as well as towns and villages near the targeted site, according to a statement Sunday from Statoil.
Colombia's president said a citizen was presumed dead.
No known French hostages are unaccounted for, France's Defense Ministry said Saturday.
One man -- identified as Yann Desjeux -- died after telling the French newspaper Sud Ouest on Thursday that he and 34 other hostages of nine different nationalities were treated well. Three others who had been held are safe.
There are still 10 Japanese who have yet to be confirmed safe, JGC -- the engineering firm -- said Sunday.
Three hostages were on their way back to Malaysia, the country's state-run news agency reported Sunday. But there is a "worrying possibility" that another is dead, while a fifth is unaccounted for, the agency said.
Five Norwegians are missing, while eight are safe, Norwegian Prime Minister Jens Stoltenberg said. "We know that there are many fatalities," Statoil CEO Helge Lund said Sunday. "A new day without answers has increased our concern."
One Romanian lost his life, the country's Foreign Ministry said Saturday. Four other Romanians were freed.