WASHINGTON, March 17 (Reuters) - An al Qaeda affiliate holding two captured Austrians has extended by one week, to midnight on Sunday, its deadline for Austria to meet its demands, according to an Internet posting monitored on Monday.

Austria had said on Sunday the deadline had been extended for an unspecified time.

The U.S.-based terrorism monitoring service SITE Institute said Al Qaeda in the Islamic Maghreb posted the note to Jihadist forums.

In a SITE translation, the group said the extension was "the final opportunity from the Mujahideen to absolve their responsibility before the families of the two hostages and the Austrian people, and to allow adequate time for the state of Austria to respond to the legitimate demands."

It warned that any military attempt to free the two would lead to the "immediate execution" of the kidnapped.

The captives, Andrea Kloiber, 43, and Wolfgang Ebner, 51, went missing while on holiday in Tunisia last month and the Algerian-based Al Qaeda in the Islamic Maghreb said it seized them on Feb. 22.

Algerian security sources have said Austria had accepted the principle of paying a ransom and discussions were focused around the sum of five million euros ($6.7 million). They said al Qaeda had stopped demanding the release of 10 militants held in Algeria and Tunisia.

However, Monday's message said, "as much as you care about liberating your citizens, we care about the release of our captive brothers," according to SITE.

The two Austrians are reported to be held captive in northern Mali.

(Reporting by Randall Mikkelsen, Editing by Sandra Maler)

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