A videotape aired by Aljazeera on Sunday showed eight frightened captives holding their passports and giving their nationalities. The hostages were seen guarded by masked men with arms.
The hostages were three from Pakistan, two Turks, an Indian, a Nepali and one from the Philippines.
The Iraqi group said the hostages were drivers of lorries used in carrying supplies to occupation troops in Iraq.
"We have released them in response to a call from the Association of Muslim Scholars...after we were sure that they will not deal with the occupation forces again," the group said in the tape.
The tape also showed one of the masked men handing Iraqi money to one of the hostages.
The video was aired amid a spate of abductions of foreigners in Iraq, notably three Japanese whose captors reportedly
threatened to execute them unless Japan pulled its troops out of the war-ravaged country despite an appeal by the Association of Muslim Scholars for their release.
A British citizen abducted in southern Iraq was set free earlier