by Sam Dagher
BAGHDAD, July 31 (AFP) - A tribal mediator said here Saturday he was optimistic that seven foreigners held hostage in Iraq would be released, even after a deadline by their abductors to execute one of them expired.
The group of Al-Qaeda-linked operative Abu Mussab al-Zarqawi, meanwhile, said it had kidnapped two drivers for a Turkish firm in Iraq and threatened to behead them in 48 hours if the company did not pull out of the country, Al-Jazeera reported.
Three hooded gunmen were seen in a video broadcast by the Arab satellite news channel standing behind the pair with a banner carrying the group's name in the background.
In the case of the seven foreigners, Islamic militants had issued a "last chance" for a Kuwaiti firm and governments of the three Indians, three Kenyans and an Egyptian to capitulate to their demands or they would start executing their captives at 1500 GMT.
But self-styled mediator Sheikh Hisham al-Dulaimi appealed to the hostage-takers to stay their threat to kill one of the hostages, saying he was close to finalising a deal with their Kuwaiti employer acceptable to the militants.
Dulaimi said the Kuwait and Gulf Link Transport company had agreed to end its operations in Iraq and compensate 250 victims of US military action in the flashpoint Sunni Muslim city of Fallujah, west of Baghdad.
The Kuwaiti firm was not available for comment.
"We appeal to the kidnappers and tell them that we are in negotiations with the Kuwaitis, but that cannot be possibly completed in hours, we need some time," he said outside his Baghdad offices, flanked by other tribal notables.
"Negotiations are still ongoing and we are optimistic and final results may be announced tomorrow," Dulaimi said.
The previously unknown Islamic Secret Army - Holders of the Black Banners group had also demanded that Iraqi prisoners in Kuwaiti and US-run detention centres be freed.
Dulaimi said that he met with an Iraqi representative of the Kuwaiti firm and that he was in constant touch over the telephone with the firm's directors in Kuwait City, but denied he had any direct contact with the hostage-takers.
The sheikh, who hails from one of Iraq's most powerful tribes, also assured the families of the hostages.
"I want to comfort the families of the hostages and tell them that I am working for the release of their loved ones and I hope to put the smile back on their faces soon," he said.
Families and friends of the three Indians, meanwhile, huddled together in their remote villages for fear of the execution deadline against their loved ones -- the third since they were kidnapped 10 days ago.
The relatives have made impassioned pleas to the kidnappers, saying they would give all their wealth in return for the mens' safe return.
Amid the crisis, Iraqi interim Prime Minister Iyad Allawi arrived in Kuwait for an official visit set to coincide with the 14th anniversary of former president Saddam Hussein's invasion of the emirate.
It will be the final leg of Allawi's Middle East tour, driven by a need to normalise diplomatic ties and ease Iraq's chronic debt burden.
In Turkey, CNN-Turk reported that a trucker abducted two weeks ago had returned home, and hopes rose in Jordan after the brother of one of four hostages said their promised release had been delayed but was imminent.
"My brother Ahmed Abu Jaafar just telephoned. He told us 'I am in good hands, don't worry. Our release has been delayed, those who are holding us having been engaged in combat with the Americans,'" Teysir Abu Jaafar said.
Following a rally to support the Iraqi resistance by relatives of the hostages in Jordan, the family had been told by the kidnappers that the truckers would be handed over Saturday morning in Fallujah.
At least one Iraqi was killed and five others wounded in renewed clashes later Saturday between insurgents and US troops in the city, hospital and police sources said.
US Secretary of State Colin Powell admitted here Friday that the wave of kidnappings was having a "deterring effect" on efforts to secure and rebuild Iraq, but vowed Washington was committed to defeating the insurgency.
A purported Islamist group in Iraq, meanwhile, warned that any Muslim troops sent to the country will be considered "occupation forces," in an implicit threat they will be attacked, Al-Jazeera reported.
On the ground, a senior aide to Moqtada Sadr was arrested Saturday in the city of Karbala, threatening to provoke a fresh revolt, said spokesmen for the radical Shiite Muslim cleric.
The detention of one of Sadr's aides in March and the closure of one of his newspapers on charges that it was instigating violence triggered a bloody two-month anti-coalition revolt across Baghdad and the Shiite south.
The director of a teacher training college was also killed in Mahmudiyah, 30 kilometres (12 miles) south of Baghdad, in what his brother claimed was part of a wider campaign against Shiites in the area.