Aviation sources told AFP the aircraft was a McDonnell Douglas MD-83 leased from Spanish company Swiftair carrying passengers of different nationalities.
Its six-member crew were all Spanish, said Spain's airline pilots' union Sepla, while Swiftair confirmed the aircraft had gone missing less than an hour after takeoff from Ouagadougou.
Many French nationals were thought to be on board the plane, France's Transport Minister Frederic Cuvillier said in Paris.
He said after a government meeting that top civil aviation officials were holding an emergency meeting and a crisis cell had been set up.
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"The plane disappeared at Gao (in Mali), 500 kilometres (300 miles) from the Algerian border. Several nationalities are among the victims," Prime Minister Abdelmalek Sellal was cited as saying by Algerian radio.
The Air Algerie source earlier said contact was lost while the airliner was still in Malian airspace and approaching the border with Algeria.
Despite international military intervention still under way, the situation remains unstable in northern Mali, which was seized by jihadist groups for several months in 2012.
On July 17, the Bamako government and armed groups from northern Mali launched tough talks in Algiers aimed at securing an elusive peace deal, and with parts of the country still mired in conflict.
"Contact was lost after the change of course."
The carrier, in a statement carried by national news agency APS, said it initiated an "emergency plan" in the search for flight AH5017, which flies the four-hour passenger route four times a week.
One of Algeria's worst air disasters occurred in February this year, when a C-130 military aircraft carrying 78 people crashed in poor weather in the mountainous northeast, killing more than 70 people.