Egyptian officials in Cairo and Washington dismissed a CNN report Tuesday that their government paid hundreds of thousands of dollars in ransom for the release of an Egyptian diplomat in Iraq.  

Masked men calling themselves the Lions of God Brigades abducted Momdoh Kotb, Egypt's third-highest ranking diplomat in Iraq, as he was leaving a mosque Thursday and released him Monday.

Two high-level sources in Baghdad told CNN the Egyptian government paid for Kotb's release.

Among CNN's sources is a highly placed Iraqi who said Egypt paid a ransom but made no concessions about its security commitments to Iraq.

Egypt "categorically denies any money (was) paid out to anybody," said Nabil Fahmy, Egypt's ambassador to the United States.

Paying ransom "has never been our policy anywhere," Fahmy said.

As evidence, Fahmy pointed to two recent abductions of Egyptian drivers in Iraq. One was killed and the other was released.

US State Department spokesman Adam Ereli initially said he "could not speak to the veracity of the CNN report," then changed his comments to state that the Egyptian government indicated it "did not make any concessions to the terrorists."

"Our information is the Egyptian government remains steadfast in this manner," he said.

The Lions of God Brigades, a previously unknown group, did not make any demands but said Kotb's abduction was a response to Egypt's offer to help with security matters in Iraq.

Kotb's liberation came moments after the Arabic-language television network Al-Jazeera aired a videotape on which the narrator said the hostage-takers declined to accept a large amount of money that had been offered them in exchange for the diplomat's release.

The narrator added that Kotb was being released because he was a polite, religious man.

US and Iraqi officials strongly discourage paying ransoms or acquiescing to kidnappers' demands because they fear it could inspire insurgents to use the tactic more frequently.

Jordanian businessman Rami al-Ouweiss said Tuesday his company would stop cooperating with the US military because a group calling itself Mujahedeen Corps, which abducted two of his employees, had demanded that action.

In an interview on an Arabic-language television station, al-Ouweiss said he would rather sacrifice his lucrative ties with the US Marines for the safety of his workers.

In the same interview, al-Ouweiss said the kidnapping stemmed from long-standing business and tribal rivalries and that he and his family have received daily threatening calls from the kidnappers.

Insurgents in Iraq still hold at least 11 other foreigners -- including an Egyptian trucker -- and one Iraqi while making demands that their companies cease cooperating with the US military or end their operations in Iraq.

(China Daily via agencies, July 28, 2004)