(Adds U.N. statement)

SPIN BOLDAK, Afghanistan, March 17 (Reuters) - The Taliban have extended their deadline to execute a kidnapped Italian journalist by three days to Monday to give Rome more time to respond to their demands, a rebel spokesman said on Saturday.

News of the extension of the deadline, which had been set to expire on Friday, came a day after Italy appealed for time as the rebels said they had killed an Afghan driver abducted along with La Repubblica reporter Daniele Mastrogiacomo.

"We are extending the deadline for three days from Friday," Mullah Hayatullah Khan told Reuters. "We will wait for the response in regard to our demands."

Khan, speaking by satellite phone from an undisclosed location, said there had been "contacts" for Mastrogiacomo's release but did not elaborate.

He said the rebels had killed driver Sayed Agha on Thursday after a Taliban court found him guilty of spying, and would now decide the fate of Mastrogiacomo and his Afghan interpreter.

The U.N. mission in Kabul appealed to the abductors to "show their humanity" by releasing him and his Afghan colleagues.

"Mr. Mastrogiacomo is a well-known journalist whose sympathies for the people of Afghanistan should be beyond doubt to anyone," a U.N. spokesman said in a statement.

"Throughout his reporting of this region over many years he has displayed compassion for the poor and suffering, communicating their voices to the outside world," he said. "We know of no reason whatsoever for him to be under anyone's suspicion."

Mastrogiacomo was seized with his two Afghan colleagues in the lawless southern province of Helmand last week and the Taliban said he had confessed to spying for British troops.

La Repubblica denied that the reporter was a spy and said the Karachi-born man had been writing for them since 1980 and reporting from Afghanistan since Feb. 28.

Mastrogiacomo appeared in a video released on Wednesday, appealing to the Italian government to work for his freedom. In an audio message released on Thursday he said his captors would kill him unless their demands were met within two days.

The Taliban want Italy to withdraw its troops from Afghanistan and are also insisting on the release of one of their spokesmen captured in January.

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