UPDATE 1-Nigerian militants say Israeli hostage located

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LAGOS, Aug 28 (Reuters) - Nigerian militants said on Thursday they knew where an Israeli kidnapped by gunmen was being held but withdrew their offer to help rescue him, accusing an Israeli news outlet of branding them as “terrorists”.

“(The hostage) Mr Advi has been located and seems to be a diabetic patient,” the Movement for the Emancipation of the Niger Delta (MEND), the main militant group in Nigeria’s oil-producing south, said in an e-mail.

“MEND will only plead with his captors to be humane but will not allow the security operatives to earn their pay by finding him and negotiating his release,” it said.

Four gunmen abducted the 60-year-old project manager, who works for Israeli construction firm Gilmor Engineering Limited, in the southern oil city of Port Harcourt late on Tuesday and fled by stealing his vehicle.

MEND, the region’s main militant group whose campaign of sabotage has included bombing pipelines and kidnapping foreign oil workers, said on Wednesday it was not responsible.

It had offered to assist the Israeli government in locating and negotiating the release of the hostage if asked to do so.

“That offer has been suspended until the Israel National News (Arutz Sheva) rescinds its description of MEND as a terrorist group and offer an apology in the next publication,” the group said.

Arutz Sheva is an Israeli radio station which also has a news website. (Reporting by Nick Tattersall)