The trapped workers say that the military in Mozambique is trying to evacuate them from the city, which is located near a large gas plant on the Afungi Peninsula in the province of Cabo Delgado.
Follow the local news site Pinnacle News At least 21 soldiers and many civilians were killed in the attack.
– Almost the whole city is destroyed. Many are dead, said one of those working at the gas plant on Friday night.
There have also been unconfirmed reports of hijacking of two vessels outside Palma.
Islamistar activist
Militant Islamists start the attack on the coastal city on Wednesday afternoon. Residents fled into a forest area, and the workers sought refuge at Hotel Amarula.
The authorities have confirmed the attack and say that soldiers have been sent to the area to fight against the attackers.
Another trapped worker, who works for a subcontractor to the French oil and gas giant Total, says that a helicopter flew over the hotel to try to find a safe way to evacuate the workers.
Thousands driven to flee
Total has invested large sums in the extraction of natural gas in Cabo Delgado, but earlier this year evacuated several thousand employees due to lack of security.
Militant Islamists who swear allegiance to the extremist Islamist group IS have attacked villages and towns in the province, forcing nearly 700,000 to flee.
At least 2,600 people have been killed in acts of violence in the area, according to the overview Armed Conflict Location and Event Data (ACLED).
Palma is located in the far north of Mozambique, near the border with Tanzania.
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