Maurizio Scelli, the outgoing chief of the Italian Red Cross, was quoted as telling Turin daily La Stampa that he kept the deal secret from US officials, complying with "a nonnegotiable condition" imposed by Iraqi mediators who helped him secure the release of two young Italian women.
Simona Pari and Simona Torretta were abducted in Baghdad on 7 September and freed on 28 September.
"The mediators asked us to save the lives of four alleged terrorists wanted by the Americans who were wounded in combat," Scelli was quoted as saying by the daily newspaper. "We hid them and brought them to Red Cross doctors, who operated on them."
They took the wounded fighters to a Baghdad hospital in a jeep and in an ambulance, smuggling them through two US checkpoints by hiding them under blankets and boxes of medicines, Scelli said.
Also as part of the deal, four Iraqi children suffering from leukaemia were brought to Italy for treatment, he said.
Hidden from US
Scelli said he informed the Italian government of the deal and of the decision to hide it from the US through Gianni Letta, an undersecretary in Premier Silvio Berlusconi's government who has been in charge of Italy's hostage crises in Iraq.
"Keeping quiet with the Americans about our efforts to free the hostages was an irrevocable condition to guarantee the safety of the hostages and ourselves," he told La Stampa. He said Letta agreed.
Officials at the Italian Red Cross headquarters in Rome said Scelli was out of the office and could not be immediately contacted.
Italy has deployed some 3000
troops in southern Iraq
In a statement on Thursday, the Italian government stopped short of denying it knew about the deal. It said Scelli acted independently and that the government "never conditioned or oriented his action, which ... was developed
in complete autonomy".
The statement also did not directly address if Italy had kept the US in the dark about Scelli's efforts, but reiterated that Italy has always maintained a "full and reciprocal" cooperation with its American allies in Iraq.
The head of the Italian parliamentary commission overseeing secret services, Enzo Bianco, said the commission would hold hearings soon with Scelli and government representatives, news agency ANSA reported.
Opposition leaders called on the government to tell parliament what really happened and contended the alleged deal endangered Red Cross neutrality.
"Keeping quiet with the Americans about our efforts to free the hostages was an irrevocable condition to guarantee the safety of the hostages and ourselves"
outgoing chief of Italian Red Cross
"Scelli conducted an improper negotiation using the symbol of the Red Cross as a shield," said opposition lawmaker Tana De Zulueta.
"The Red Cross is obliged to offer assistance to all parties involved in a conflict."
The International Red Cross said it was not involved in or informed of Scelli's activities.
It said the Italian Red Cross is an independent organisation that doesn't answer to the Geneva-based International Committee of the Red Cross.
At least eight Italians have been kidnapped in Iraq, and two of them were killed. An intelligence officer who was escorting a hostage to freedom mistakenly was killed by US fire in Baghdad in March.