Sana'a, Yemen - A Yemeni official assigned by the government to negotiate with kidnappers of three German hostages in western Yemen met the abductors and their hostages on Wednesday, a mediator said.

Abdul-Qawi Obad, the undersecretary of Dhalea'a province, and tribal mediators met the kidnappers at their hideout east of the capital Sana'a and negotiated the release of the three hostages, said Sheikh Nasser Ahmed Sharif, who is talking part in the talks.

"Talks are advancing, and we expect the three Germans to be set free within the next two days," Sharif told Deutsche Presse-Agentur dpa by telephone from Naba'ah, some 60 kilometres east of Sana'a.

Sharif said the kidnappers demanded authorities to move security forces positioned outside their hideout to prevent any confrontation.

Yemeni police said Tuesday that they closed in on the hideout of abductors holding the three Germans hostage in a remote area east Sana'a.

Police said five tribesmen led by Abdu-Rabu Saleh al-Tam were holding the hostages in a house in the mountain village of Naba'ah in the Khawlan district, about 60 kilometres from Sana'a.

"Security forces cordoned off the house and closed all roads leading to the village," an Interior Ministry official told Deutsche Presse-Agentur dpa.

The kidnappers demanded the release of al-Tam's son and brother who have been jailed at the central prison in Sana'a for abducting five Yemeni engineers and holding them hostage for six months last year.

Al-Tam also demanded authorities pay him 40 million riyals (200,000 dollars) in compensation for a property in Sana'a, the ownership of which he disputed with an influential businessman.

The kidnappers, who belong to the powerful Bani Dhabian tribe, abducted the three Monday as they drove their car outside the historic city of Rada'a, about 130 kilometres south of Sana'a.

The hostages, an employee of the German aid agency GTZ and her parents, were in good health and had not been harmed.

Police arrested dozens of tribesmen from the Bani Dhabian tribe late Monday to put pressure on the kidnappers to free the hostages, tribal sources told dpa.

The Bani Dhabian tribe is known for kidnapping foreigners to press the government for better living conditions. (dpa)