BAGHDAD, Iraq (AP) – Militants released seven foreign hostages Wednesday after their employer paid $500,000 ransom, while France mustered support from Muslims at home and abroad to push for the release of two French journalists still held captive in Iraq.

The U.S. military, meanwhile, said a U.S. airstrike late Wednesday hit a suspected safehouse used by followers of Jordanian militant Abu Musab al-Zarqawi in Fallujah. Witnesses said 17 people, including three children, were killed and six wounded. U.S. forces have bombed numerous targets in the city, which is a center of Sunni Muslim insurgents.

Earlier in the day, gunmen fired at a convoy carrying Ahmad Chalabi, a prominent Iraqi politician and one-time U.S. ally, wounding two of his bodyguards just hours before he joined other officials for the swearing-in ceremony of Iraq’s new transitional assembly.

The first meeting of the National Council, which is to act as a watchdog body over the interim government and help shepherd Iraq toward January elections, was marred by a nearby mortar barrage that wounded one person, the U.S. military said.

Militants waging a violent 16-month-old insurgency have turned to kidnapping foreigners in recent months as part of their campaign to drive out coalition forces and contractors. Other groups have taken hostages in hopes of extorting ransom, sometimes masking their greed under a cloak of politics.

The group holding the seven truck drivers, which called itself The Holders of the Black Banners, had initially demanded that their employer stop working in Iraq, that Iraqi detainees be released and that compensation be paid to victims of fighting in Fallujah.

By last week, the group had dropped all other demands and said they just wanted a commitment from the company, Kuwait and Gulf Link Transport Co., to stop working here, which it soon received.

But after the seven men – one Egyptian, three Indians and three Kenyans – were let go and whisked out of the country, the company revealed the kidnappers had demanded $6 million to $7 million in ransom. In the end, a team of employees drove to an unspecified location where the drivers were held and paid $500,000 to secure their release, KGL chief executive officer Said Dashti said.

“They (the kidnappers) were not trying to make a political statement, they were purely extortionists,” he said.

The announcement the men were freed sparked celebrations in their home countries. “My joy today is as big as the whole world. I feel he is born again,” said Nadia al-Shanawani, mother of Egyptian hostage Mohammed Ali Sanad.

In a video given to news agencies after the release, the seven hostages were shown standing against a wall as a masked man shook each man’s hand, hugged him and handed him a Quran, another Islamic book and what appeared to be a CD or cassette.

“We warn all companies that work with the occupiers of the black destiny awaiting them in Iraq if they continue with this work,” a voiceover said.

Meanwhile, France called on Arab and Islamic leaders to continue their push to secure the release of French reporters Christian Chesnot and Georges Malbrunot, held by a militant group that demanded France annul its ban on Muslim head scarves in French public schools.

Foreign Minister Michel Barnier, who has been shuttling across the Middle East to rally support, arrived in Qatar on Wednesday. A French special envoy was sent to Baghdad to pursue contacts with the hostage-takers.

Representatives of the French Council for the Muslim Faith, which serves as a link to the French government, left Wednesday for Baghdad in hopes of retrieving the journalists.

A chorus of worldwide Muslim voices – from human rights groups to hard-line religious clerics – has pleaded for their release in an unprecedented display of unity.

The Palestinian militant group Hamas, which claimed responsibility for deadly twin bombings in Israel on Tuesday, appealed for their freedom. Libyan leader Moammar Gadhafi said kidnapping foreigners in Iraq was “terrorism,” and Arab League Secretary-General Amr Moussa reiterated his plea for their release.

The chorus of appeals stood in sharp contrast to the muted reaction to the slaughter of 12 Nepalese workers held hostage by a different militant group in Iraq. A video of the mass killing was posted on an Islamic Web site Tuesday.

The slayings caused a storm of protest in Nepal, where the government imposed a curfew Wednesday after thousands of protesters ransacked a mosque and fought with police. But the killings were only mildly criticized by some of the same Islamic leaders demanding the release of the French journalists.

“We wished (the Nepalese) could have been released by the kidnappers so that they could have become messengers for their brothers to warn them not to come to Iraq,” Mohammed Bashar al-Faidi, a spokesman for the Muslim Scholars Association, a Sunni group believed to have links to insurgents, said Tuesday after harshly condemning the French kidnapping.

Many Iraqi groups appreciate France’s opposition to the U.S.-led war in Iraq, but see the Nepalese as contractors whose presence aided coalition forces.

Meanwhile, Interim Prime Minister Ayad Allawi ordered an investigation into the attack on Chalabi’s convoy, condemning it as “an attempt to launch a campaign of terror and destabilization” aimed at political and religious figures.

Hours later, an unharmed Chalabi joined the National Council for its swearing-in ceremony in the Baghdad convention center. The council later chose Fuad Masoum, a Kurd, as its president. He had presided at a national conference last month that helped choose the council’s members.

The 100-member assembly must approve the national budget and can veto some government decisions with a two-thirds majority vote. It is intended as an important step toward representative government before elections.

As the meeting convened, several mortar rounds exploded near the convention center inside the heavily guarded Green Zone enclave, wounding one person, the U.S. military said.

Two rounds later landed in the Green Zone itself, sending up a plume of gray smoke.

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