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By Ibrahim Mohamed

MOGADISHU, May 23 (Reuters) - Somali pirates have released a Jordanian-flagged cargo ship hijacked last week off the lawless coast of the Horn of Africa nation, a shipping agent said on Friday.

The "Victoria", owned by a United Arab Emirates company, was carrying 4,200 tonnes of sugar in humanitarian aid sent from Denmark to the Somali capital Mogadishu.

"The ship has been released. All the pirates have left the ship, the crew is safe and healthy. The ship is sailing to Mogadishu to discharge its cargo," the ship's local agent Mohamed Ahmed Roble told Reuters.

"The pirates and the businessmen whose cargo the ship was carrying have reached a verbal agreement. We did not pay any ransom," he said.

But a relative of one of the pirates said a small amount of money was paid for the ship and its crew of around 12 people that included Pakistanis, Indians, Bangladeshis and Tanzanians.

"I understand something small has been paid to the pirates and the people who facilitated the release. The amount was not that much. It was smaller compared to what other pirates have received in the past seizures," Ali Jibril told Reuters from Haradheere village, close to where the ship was being held.

After 17 years of conflict without effective central government, pirates have turned Somalia's waters into some of the most dangerous in the world.

In an effort to combat the rising number of hijackings, France, Britain, the United States and Paraguay introduced a draft resolution at the U.N. Security Council earlier this year to authorise countries to arrest pirates in Somali waters.

Piracy as well as kidnapping are lucrative businesses in Somalia. Most captors treat their hostages well in anticipation of a large ransom. (Additional reporting by Guled Mohamed in Nairobi) (Writing by Jack Kimball; Editing by Andrew Cawthorne) (For full Reuters Africa coverage and to have your say on Somalia and other top issues, visit: http://africa.reuters.com/)

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