NEW DELHI (AP) – Attempts in Iraq to free seven hostage truck drivers from India, Kenya and Egypt suffered a double setback yesterday, when their company pulled out of talks with a negotiator – hours after the drivers’ kidnappers made a new demand.

The drivers’ employer, Kuwait and Gulf Link Transport Co, or KGL, had been negotiating with an Iraqi tribal chief, Sheik Hisham al-Duleimi, for the release of the seven men abducted July 21.

“We have pulled out of the negotiations,” said KGL spokeswoman Rana Abu-Zaineh.

In a statement released later, KGL said it had discovered that the kidnappers had not “officially delegated” al-Duleimi to represent them in the negotiations.

Al-Duleimi has said he has had no direct contacts with the kidnappers, and has relied on the media to convey his messages to them.

KGL urged the kidnappers to commence direct talks or to appoint “anyone they see fit for ending this crisis”.

Indian news channel NDTV had earlier reported that KGL had pulled out because the captors “asked for more money”.

It said the kidnappers had asked KGL to compensate Iraqi citizens affected by U.S.-led military campaign in the Iraqi city of Fallujah.

The TV report also quoted unidentified KGL sources as saying that the company had “carried millions of dollars into Iraq and had kept a plane on standby in Baghdad, costing hundreds of thousands of dollars”.

The report couldn’t be independently verified.

Earlier yesterday, Indian External Affairs Minister Natwar Singh had said KGL and al-Duleimi “had finalised details of a settlement last evening. Sheik Duleimi wanted time to consult the hostage takers and work out the modalities.”

Also earlier in the day, KGL spokeswoman Abu-Zaineh had told Aaj Tak news channel that the company had been close to bringing the men back home – until late Saturday night, when it “received a new demand and we are now discussing it”. She wouldn’t say what the new demand was.

The seven captives are Ibrahim Khamis, Salm Faiz Khamis and Jalal Awadh of Kenya; Antaryami, Tilak Raj and Sukdev Singh of India; and Mohammed Ali Sanad of Egypt. Militants had threatened to behead them if their employer kept doing business in Iraq and their respective countries did not withdraw their citizens.

The kidnappers, who call themselves the “The Holders of The Black Banner”, have repeatedly extended their deadlines for killing the seven hostages.

A diplomat in Baghdad, with knowledge of the crisis, denied on Saturday that the men were about to be released, and said it wasn’t clear if the kidnappers have even agreed to start negotiating. The diplomat spoke on condition of anonymity.

Militants in Iraq have kidnapped more than 70 foreigners in recent months in an effort to push countries out of the US-led coalition that invaded the country and toppled its former leader, Saddam Hussein, over a year ago.