Preliminary reports indicate that 20 people were killed, Alpha Barry, the nation's foreign minister, told CNN affiliate BFMTV.
Some of the freed hostages have been hospitalized, he said.
The French Interior Ministry told the affiliate that 126 people have been freed. French and Burkinabe forces were taking part in the operation to rescue hostages.
'We could hear them talking'
Survivors described horrific scenes as the gunmen paced and fired in the hotel.
"We could hear them talking and they were walking around and kept shooting at people that seemed alive," survivor Yannick Sawadogo told the affiliate.
"Everyone was panicked and was laying down on the floor. There was blood everywhere, they were shooting at people at point blank."
Sawadogo said he escaped through a broken window, and could barely see because of smoke.
Search for hostages, terrorists
Burkinabe forces scoured the rooms at the Splendid Hotel, looking for terrorists and remaining hostages. Those rescued included a government minister, state media reported.
The West African nation's forces, with logistical support from American and French troops, circled the hotel for hours before they started rescuing hostages.
Shortly after the forces stormed the hotel, the sounds of gunshots faded.
Al Qaeda in the Islamic Maghreb claimed responsibility for the Friday night attack in the capital of Ouagadougou. It mirrored another attack at a Mali hotel last year, which the militant group also said it conducted.
Hotel popular with diplomats:
The attack in Burkina Faso appeared well planned, with a group of terrorists coming to the hotel during the day and mingling with guests, Barry said.
When darkness fell, more attackers joined the group, he said.
Before the hotel assault, the gunmen attacked the Cappuccino café across the street, which had about 100 people inside, according to the state broadcaster.
The gunmen then took off to the Splendid Hotel -- a popular meeting spot for Western diplomats and business people. They fired and seized hostages.
Witnesses said the attackers wore turbans and spoke a language not native to Burkina Faso, a former French colony.
As the siege continued, the U.S. planned to fly a drone over the scene to provide surveillance, a defense official said.
The U.S. has about 75 military personnel in Burkina Faso, including 15 assigned to the embassy, according to the defense official.
An additional 60 help train and advise the French military in the nation.
CNN
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