Efforts to secure the release of seven hostages, including three Indians in Iraq suffered a setback on Sunday night with key Iraqi negotiator pulling out of the parleys amid conflicting reports on their being set free.

Kenyan Foreign Minister Chirau Ali Mwakwere was quoted by a news agency as saying in Nairobi that all the hostages, which also include three Kenyans and an Egyptian, have been freed and were in the safe custody of Egyptian Embassy in  Baghdad. But the Indian Government said it has no confirmation of this.

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Negotiator Sheikh Hisham Al-Dulaimi was quoted by another agency in Baghdad as saying: "I am withdrawing because I have reached no agreement with the Kuwaitis (the employer of the kidnapped truck drivers)...I don't know what is going to happen."

The Kuwaiti employer of the hostages Kuwait and Gulf Link Transport Company (KGL) said Dulaimi has withdrawn from the talks but efforts were on to persuade him to remain engaged with the abductors.

"We are trying to persuade Dulaimi to continue to pursue the negotiations as he has been doing a good job. If, however, he does not want to continue, then the kidnappers may ask someone else or we may re-open direct negotiations," KGL spokesperson Rana Abu-Zaineh told PTI from Kuwait.