The raid on the Radisson Blu hotel, which lies just west of the city centre near government ministries and diplomatic offices in the former French colony, comes a week after Islamic State (IS) militants killed 129 people in Paris.
170 taken hostage at Radisson hotel by men screaming 'Allahu Akbar'.
At least two private security guards have been injured, according to Malian security forces
Yesterday, Taoiseach Enda Kenny said Ireland was prepared to send additional Irish troops to Mali in order to relieve French soldiers who would be sent to relieve French forces to fight IS.
There are currently 10 members of the Irish Defence Forces in Mali and all are accounted for this morning, according to the Defence Forces.
Turkish Airline has six staff members inside the hotel, according to a Turkish official
Local website Malikahere reports that a "dozen men screamed Allah Akbar at the time of the attack".
Latest reports from Reuters indicate that Mali hotel gunmen have freed some hostages including those able to recite verses from the Koran.
Local newspaper Jeune Afrique reports that three heavily-armed men entered hotel at 7am. The number of assailants and their reasons behind it remain unclear.
The identity of the Bamako gunmen, or the group to which they belong, is not known.
Northern Mali was occupied by Islamist fighters, some with links to al Qaeda, for most of 2012. Although they were driven out by a French-led military operation, sporadic violence has continued.
The security source said as many as 10 gunmen had stormed the building, firing shots and shouting "Allahu Akbar", or "God is great" in Arabic.
The Chinese state news agency Xinhua said several Chinese tourists were among those trapped inside the building.
The company that runs the hotel, Rezidor Group, said it understood that there were two gunmen.
"According to our information, two people are holding 140 clients and 30 employees," it said in a statement quoted by the BBC.
A senior member of the hotel's security detail said two private security guards had been injured in the early stages of the attack, which began at 7 a.m. (0700 GMT).
Witnesses in the area said police had surrounded the hotel and were blocking roads leading into the neighbourhood.
The U.S. Embassy tweeted that it was "aware of an ongoing active shooter operation at the Radisson Hotel," and instructed its citizens to stay indoors.
An Islamist group claimed responsibility for the death of five people last March in an attack on a restaurant in Bamako that is popular with foreigners.
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