At least seven soldiers were killed early Friday in an ambush upon their base, reported the Algerian newspaper El Watan in its online edition.
The attackers, armed with automatic weapons, surprised the soldiers early, while many of them were still asleep, reported the paper, dpa reported.
Information from military sources stated that three of the attackers also died in the incident. One soldier remains missing.
The attack occurred near the town of Ziama Mansouria, east of Algiers. Attacks are on the rise in the North African country, with speculation rife that radical Islamists are trying to spread unrest, especially as the government wobbles in the wake of political and social protests.
About a week ago, five people were killed in a bombing.
The country is home to the organization al-Qaeda in the Islamic Maghreb (AQIM), the successor to the giant Algerian terror organization Salafist Group for Preaching and Combat (GSPC).