At least one French soldier died and 17 extremist were killed in a failed bid to free a French hostage held in southern Somalia since 2009.

At least one French soldier died and 17 extremist were killed in a failed bid to free a French hostage held in southern Somalia since 2009, the French defense minister said Saturday.

The operation to free the secret agent, with the alias of Denis Allex, was launched by France's elite DGSE secret service, Defence Minister Jean-Yves Le Drian said in a statement.

"All indications are (that Allex was) killed by his captors," Le Drian said, adding that one French pilot was killed and another soldier was missing.

But the Shebab extremists denied Le Drian's assertion that they had killed the hostage, adding that they would decide his fate in two days and issuing a stern warning to Paris.

Le Drian said the raid in Bulomarer, some 110 kilometers (70 miles) south of the Somali capital Mogadishu, was sparked by the "intransigence of the terrorists who have refused to negotiate for three and a half years and were holding Denis Allex in inhuman conditions."

French President Francois Hollande expressed his great distress over the deaths and extended his condolences to the families of victims.

Four military helicopters were used in the raid in Shebab-controlled Bulomarer, witnesses said.

The Al-Qaeda linked Shebab lost their main strongholds in the south and centre of the country following an offensive launched in mid-2011 by an African Union force, but they still control some rural areas.

Allex is among nine French hostages in Africa of whom at least six are held by Al-Qaeda in the Islamic Maghreb (AQIM).

Somalia has not had an effective central government since 1991. However, a new administration took office last year, ending eight years of transitional rule by a corruption-riddled government.