"Two Americans and a British civilian were kidnapped from their house in the Mansur district in Baghdad this morning around 0600 (0200 GMT)," ministry spokesman Colonel Adnan Abd al-Rahman said, correcting an earlier statement that the trio were all British.
He said a group of armed men had driven up in a minibus before bursting into the house and snatching the three men.
As yet unconfirmed, Aljazeera has learnt that the US captives' names are Jack Hensley and Eugene Armstrong while the UK captive may be called Ken Betley.
Iraq's Interior Ministry said all three work for GSCS, a United Arab Emirates-based firm that has won several building contracts in Iraq.
A colonel from the Maamun police station that patrols the western part of al-Mansur said the Briton and two Americans worked for a supply company and had been seized at gunpoint.
The men were staying at a house in the al-Mansur district of the capital, a wealthy neighbourhood where many foreign businessmen and contractors live, when the armed men stormed the building shortly after dawn on Thursday.
The trio were snatched from their
home in al-Mansour
The US embassy has confirmed the capture of the Americans.
The British embassy said it was trying to determine what happened.
"We are aware of these reports and we are urgently seeking information. We're just trying to verify what happened," a spokeswoman said.
Low key presence
Several security firms and other small foreign businesses have their headquarters in al-Mansur. Most are protected by armed guards, but others have a more low-key security presence.
Most foreigners in Baghdad besides journalists live in the Green Zone, a heavily fortified complex on the banks of the Tigris protected by US troops.
"Taking hostages has become a normal occurrence in Iraq where different groups have resorted to carry out such operations which do not serve Arab, Islamic or Iraqi interests"
Abd al-Sattaar Jawad,
Iraqi political analyst
At least four Westerners are currently being held captive - two French journalists and two Italian women who work for an international aid agency.
There has been a wave of foreigners being taken captive in the past six months, mostly targeting truck drivers from Egypt, Jordan, Kuwait and other Arab countries in an effort to dissuade their employers from operating in Iraq.
Country without security
But several Westerners have also been seized, including four Italian security guards taken in April. One of those, Fabrizio Quattrocchi, was subsequently killed. Another Italian, a journalist and aid worker, was killed by his hostage-takers last month.
Commenting on the wave of abductions in Iraq since the fall of Saddam, Iraqi political analyst Abd al-Sattaar Jawad told Aljazeera that the lack of security in the country was to blame.
Two French journalists are still
being held hostage in Iraq
"Taking hostages has become a normal occurrence in Iraq where different groups have resorted to carry out such operations which do not serve Arab, Islamic or Iraqi interests."
"Kidnapping which is a negative phenomenon has been rejected by Iraqis. But this has become a major phenomenon in Iraq due to the absence of security."
Jawad added that Americans and Britons in Iraq are at increased risks due to their government’s policy in Iraq.
"British forces participated in attacking al-Mahdi Army in Basra and killed many of its members so I think resistance fighters or the captors have widened their operations. Britain is now paying the price of its blind alliance with America", he added.