The GIA was the forerunner of AQIM, which still counts many Algerians in its leadership. Belmoktar remains associated with this fissiparous group -- but is very much his own man.
Abdelmalik Drukdal, the overall leader of AQIM, is said to have demoted Belmoktar late last year from his position as 'Emir of the Sahel.' Belmoktar also feuded with a rival commander - Abou Zeid - one of the most violent and radical figures in AQIM. More than most al Qaeda affiliates, AQIM is divided into often competing groups.
Citing regional security officials, Agence France Presse reported Belmoktar had been dismissed for "continued divisive activities, despite several warnings."
Libyan sources tell CNN that Belmokhtar spent several months in Libya in 2011, exploring cooperation with local jihadist groups, and securing weapons supplies.
One Arab media report - cited in a US Federal Research Division report last year - said Belmoktar had attended an event organized by Wissam ben Hamid, an Islamist commander, in the town of Sirte. There is no way to verify that.
More recently, his center of operations was the dusty town of Gao in northern Mali.
Another offshoot of AQIM known as the Movement for Unity and Jihad has taken over Gao and introduced Sharia law, including public amputations and floggings.
To make money, "Belmoktar increasingly engaged in smuggling, earning the popular nickname 'Mr. Marlboro' ... he also was involved in the smuggling of drugs, weapons, and illegal immigrants," Jean-Pierre Filiu in a 2010 Carnegie Paper.
A wide theater
Criminality helped fund jihad.
In December 2007, Belmoktar's followers murdered four French tourists in MaurItania. Two months later, they carried out a drive-by shooting on the Israeli Embassy in Nouakchott, Mauritania's capital.
"We set an ambush to kill the ambassador of the Zionist entity in Mauritania before attacking the compound that housed the embassy and the nightclub that the ambassador was present in minutes before the attack," Belmoktar told a Mauritanian journalist in November 2011.
Despite US satellite surveillance and the deployment of Algerian and MaurItanian troops to vulnerable areas, al Qaeda affiliates in the Sahel have grown in strength.
The vast distances and empty landscapes - as well as a complex relationship with local tribes - play to their advantage. Borders are difficult to seal: the rugged Algerian-Malian frontier is as long as the distance from New York to Chicago.
In February 2012, a cache of SAM missiles - looted from Libyan armories - was discovered buried in the desert not far from In Amenas.
Andrew Lebovich says the weapons - SA-7 nd SA-24 "seem to have been at a midway point in the delivery process," their destination and customer unknown.
Many AQIM figures - Belmoktar and Abou Zeid included - know the region minutely.
Indeed, Lebovich says some suspect that it was relatives of Abou Zeid who kidnapped a local Algerian official a year ago - bundling him across the border into Libya.
In the view of one Libyan source with close contacts among the region's jihadists, Belmoktar has often been a thorn in the side of AQIM's leadership.
"He was seen as a loose canon, running things in his own way," the source told CNN recently. "and the last thing the leadership wanted was to antagonize the United States just when it was trying to build up strength by stealth, below the radar."
However the hostage stand-off is resolved, that strategy has now been blown to pieces.