(Adds Italian foreign ministry comments, paragraphs 2, 11-13)

By Ismail Sameem

KANDAHAR, Afghanistan, March 18 (Reuters) - The Taliban said on Sunday they had handed a kidnapped Italian journalist to tribal leaders, but threatened to recapture him unless the Afghan government met all their demands.

Italy responded by saying that all conditions set by the abductors had been met, but added that the crisis was now in an "extremely delicate phase".

La Repubblica reporter Daniele Mastrogiacomo and two Afghan colleagues were seized two weeks ago in the lawless southern province of Helmand, where NATO and Afghan forces have launched a major offensive.

The Taliban, who said the reporter had confessed to spying for British troops, on Saturday extended a deadline to kill him if their full demands were not met by three days to Monday.

Mastrogiacomo and his Afghan translator were handed over to tribal elders after Kabul freed two Taliban officials, rebel spokesman Qari Mohammad Yousuf told Reuters by satellite phone from a secret location.

"We handed over the two to a third party after we got two of the three people we wanted to be freed," Yousuf said, without giving details of where the reporter and his Afghan translator had been moved.

A provincial official said two Taliban were released late on Saturday night. Yousuf said the pair were spokesman Latif Hakimi and a leader known as Ustad Yasar. The two were arrested in Pakistan in 2005 and handed to Kabul.

Yousuf said the rebels wanted the third person released as well before Mastrogiacomo could be freed. The Taliban said they would take back the journalist and his colleague if that demand was not met.

Some media reports said Mastrogiacomo's driver was executed on Thursday, prompting Italy to say it was redoubling efforts to secure the reporter's release.

Mastrogiacomo's employer, La Repubblica, has denied he was a spy and said he had worked for the newspaper since 1980.

"ALL CONDITIONS MET"

On Sunday, the Italian foreign ministry said that all conditions set for Mastrogiacomo's release had been met but did not elaborate. A statement from the ministry also urged the media to respect a "news blackout" on the issue.

"To facilitate the work of aid organisations involved in trying to achieve Mastrogiacomo's liberation it is necessary, in this extremely delicate phase, to ask the press to observe a news blackout," it said.

An Italian government spokesman had said earlier that reports that the Karachi-born journalist had been handed over to tribal chiefs did not mean he had been freed.

Italian Prime Minister Romano Prodi, who has been under pressure at home over his foreign policy, including on sending troops to Afghanistan, said he had spoken to Afghan President Hamid Karzai who is visiting Germany and France.

But he refused to give details of the conversation.

The Italian aid group Emergency, which says it has been mediating in the crisis and received a video of Mastrogiacomo on March 14, also said the situation was not resolved.

"The Taliban's demands need to be fully met and we are still not there, and that makes the situation complex and worrying," Emergency's Vice-President Carlo Garbagnati told Reuters.

There have been different versions of what the Taliban want in exchange for the journalist.

The rebels have at times demanded the release of one of their jailed leaders, sometimes mentioning the name of two Taliban officials and at other times, three.

The Taliban, who often execute Afghans they accuse of spying, had also called for Italy to withdraw its 1,900 troops from Afghanistan to win his freedom -- something Rome rules out.

Another Italian journalist, Gabriele Torsello, was kidnapped in Helmand in October and held for three weeks before being released unharmed. (Additional reporting by Gavin Jones and Roberto Landucci in Rome)

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