Austria says won't bow to Al Qaeda demands

BRUSSELS (Reuters) - Austrian Chancellor Alfred Gusenbauer appealed on Friday to al Qaeda's North Africa wing to release two Austrian tourists but said he had no intention of yielding to the hostage-takers' demands.

"Our priority is the health of the hostages. Hence we appeal to the kidnappers to free the hostages unconditionally," Gusenbauer told reporters on arrival for the final day of a European Union summit in Brussels.

Gusenbauer said he would raise the issue for discussion at the summit.

He said Austria was in touch with the authorities in the region but added: "We do not intend to meet the demands." Al Qaeda demanded on Thursday the release of militants held in Tunisia and Algeria within three days.

The three-day ultimatum started at midnight on Thursday, al Qaeda in the Islamic Maghreb said in a statement posted on an Islamist Web site.

Austrian Foreign Minister Ursula Plassnik said on Thursday efforts were being made to secure the release of the hostages but noted that the demands were outside Vienna's jurisdiction.

The demands and a list of the names of the group's prisoners were sent to Vienna through unidentified mediators, it said in the posting, which had pictures of the hostages, Andrea Kloiber, 43, and Wolfgang Ebner, 51.

The group, waging a violent campaign against government forces and foreign interests in North Africa, said its members were jailed for confronting "the new crusade against Islam".

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The hostages, who went missing last month during a trip to Tunisia, appeared in the pictures dressed in robes and surrounded by militants in a desert area. Their captors were armed with rifles and rocket-propelled grenade launchers.

The face of the woman, who wore a blue headscarf, was digitally blurred, apparently to abide by an austere interpretation of Islam which says women should cover their faces.

Al Qaeda has said it seized the two hostages on February 22 and warned Western tourists not to visit Tunisia. The new statement expanded the warning to include other Maghreb states -- Morocco, Mauritania and Algeria.

An Algerian newspaper said on Tuesday that the Austrian tourists had been moved by their kidnappers to Mali across the Sahara desert.

A senior security source in Mali said it was possible the kidnappers had moved to the northern desert town of Tessalit, where the al Qaeda wing -- formerly known as the Salafist Group for Preaching and Combat (GSPC) -- is believed to have a base.

(Reporting by Paul Taylor; Additional reporting by Paul Bolding in Vienna)