Kidnapped Catholic priests freed in Iraq

(Updates with comment from Iraqi cleric, changes dateline from NAPLES)

BAGHDAD, Oct 21 (Reuters) - Two Catholic priests kidnapped in Iraq have been freed and are in good health, a cleric at the residence of Cardinal Emmanuel III Delly in Baghdad said on Sunday.

"I talked to the hostages. They are well. They say they were treated like guests," said the cleric, who asked not to be identified.

He said the priests were celebrating their release with a service at a church in the northern Iraqi city of Mosul, where they were taken hostage amid reports they were being held for a $1 million ransom.

A Vatican spokesman confirmed their release.

Last week Pope Benedict appealed for the priests to be freed, using his weekly Angelus blessing to send the message that "violence cannot bring relief to this tense situation".

Christians form a small minority in Iraq. A recent U.S. State Department report on religious freedom estimated the country has about 1 million Christians, down from 1.4 million in 1987.

Most belong to the Chaldean rite, one of the ancient rites of the Catholic Church. (Additional reporting by Rome bureau)