Updated

Suspected Iraqi insurgents have demanded the release of Abu Ghraib prisoners and a huge ransom in exchange for the freedom of an American and a Filipino taken hostage last week in Baghdad, Philippine officials said Tuesday.

Gunmen on Nov. 1 seized Filipino accountant Robert Tarongoy (search), an unidentified American, a Nepalese and three Iraqis from the compound of a Saudi-based company that caters food to American troops. Two of the Iraqi hostages and the Nepalese have been freed.

Labor Secretary Patricia Santo Tomas said Tarongoy's kidnappers have contacted his employer, the Saudi Arabian Trading and Construction Co. (search) (Satco), and listed their demands for the release of the captives.

She declined to say what the demands were, but added that negotiations between the company and the abductors were under way.

Two Philippine officials dealing with the crisis said the kidnappers were demanding a ransom of at least $12 million and the release of at least four prisoners from Abu Ghraib (search), the prison where U.S. military guards were photographed beating and sexually humiliating Iraqi detainees.

"There is a group that called the company with some demands. Negotiations are ongoing through Satco," Santo Tomas told The Associated Press, referring to the hostages' employer.

In a separate interview with ABS-CBN television, she said that Philippine officials were looking for ways to directly contact the abductors and possible intermediaries, but added that the government was still pinning its hope of saving Tarongoy on the talks between his employer and the kidnappers.

"Possible mediators are being sorted out one by one, but our best lead is still the talks involving his employer," Santo Tomas told ABS-CBN.

She did not say if the government intended to negotiate with the kidnappers or just plead for Tarongoy's release. Philippine diplomats in Baghdad were keeping the interim Iraqi government aware of developments, she said.

U.S. officials have asked the Philippine government not to grant any concessions to the kidnappers. Washington strongly criticized President Gloria Macapagal Arroyo's decision in July to withdraw a small peacekeeping team from Iraq to secure the release of a kidnapped Filipino truck driver.

Santo Tomas said Philippine officials were also talking to possible intermediaries who could bring them to the kidnappers of another Filipino, Angelito Nayan, who was abducted along with two other U.N. election workers in Afghanistan on Oct. 28.

Spokesmen for the purported kidnappers, who are demanding the release of Taliban prisoners and the withdrawal of British and U.N. troops from their country, have said negotiations between their group and Afghan officials began Sunday.

The families of the Filipino hostages have repeatedly pleaded for their release in the spirit of the holy Muslim month of Ramadan, saying the two men have nothing to do with the conflicts in the two countries.