(Adds U.S. navy saying no involvement)

By Abdiqani Hassan

BOSASSO, Somalia, Sept 7 (Reuters) - An unidentified warship off pirate-ridden Somali waters captured 14 pirates and destroyed their boat, a minister of the northern Puntland region said on Sunday.

Abdulqadir Muse Yusuf, fisheries minister for the semi-autonomous region said the pirate vessel met a warship "that we think could be American" and all the pirates on board were captured and their boat destroyed.

However, the U.S. Fifth Fleet, based in Bahrain, said there was no American involvement in the operation.

Yusuf said local authorities were still investigating the identity of the warship."

Two French nationals were seized in their yacht in the perilous waters on Tuesday and the French navy has said it is ready to try to free them, although their safety came first.

The two captives were safe in a hill village 750 km (465 miles) east of Bosasso, Puntland's capital, a man who said he was the pirates' servant told Reuters on Sunday.

"The French tourists, whose boat was also hijacked, are now held inside the hilly areas of Habo village. They are safe and healthy," Abdinur Farah told Reuters from the deck of a seized Iranian ship.

He said the Iranian ship with 28 crew members including two Russians, two Pakistanis and a Syrian would soon be freed once the $2 million ransom agreed upon was paid.

"The bargaining about the ransom is over and pirates are just waiting for the money," he said.

"Puntland requested the pirates two weeks ago to hand over this Iranian ship, saying that it is carrying weapons to Eritrea. I have seen food and other odd items on the ship but I do not know what is hidden underneath."

HEFTY RANSOMS

Somali gunmen are holding more than 10 ships for ransom at Eyl, a lawless former fishing outpost now used by gangs behind a sharp rise in sea attacks.

The hijackings have become commonplace, especially in Puntland. However, pirates often treat hostages well in the hope of hefty ransoms. Most captured ships bring ransoms of more than $10,000 and in a few cases much more.

The gunmen in Eyl are also demanding a ransom of more than $9 million to free two Malaysian tankers, a Japanese-managed bulk carrier and a Nigerian tug boat.

The pirates are currently holding over 130 crew members.

Attacks at sea have boomed as lawlessness increased in Somalia, where there has not been a working government since warlords overthrew dictator Mohamed Siad Barre in 1991.

Since the start of last year, more than 8,000 civilians have been killed in fighting between allied Somali government and Ethiopian soldiers and Islamist rebels. Another 1 million have been driven from their homes.

The chaos in Somalia have also made the Horn of Africa a dangerous place for aid workers or foreigners. Two journalists, Canadian Amanda Lindhout and Nigel Brennan, an Australian freelance photojournalist, were kidnapped last month.

A local radio station reported on Sunday that negotiations for their release were ongoing.

"We contacted (people in) Australia. We made him talk to his Australian relatives," Ahmad Ali, one of the kidnappers, told Somalia's Shabelle Radio. "Negotiations are progressing currently and, God willing, will be concluded." (Additional reporting and writing by Abdi Sheikh in Mogadishu ; Editing by Helen Nyambura-Mwaura and Robert Hart)

AlertNet news is provided by