The attack on Wednesday came as nine more Iraqis were killed in nationwide violence, while the bodies of 11 policemen and soldiers were discovered in a makeshift grave.
Two foreign engineers were seized in the ambush on the three-car convoy of the Iraqna mobile phone company, an interior ministry official said, adding that three drivers and seven bodyguards were killed.
Shamel Hanafi, chief commercial officer for Iraqna, told AFP the engineers were from Malawi and Madagascar.
He said: "We don't know whether they were kidnapped, or whether they ran away or are hiding after the attack."
The government in Malawi, which has no diplomatic relations with Iraq, said it was investigating the report.
The convoy had been on its way to the western suburb of Abu Ghraib to repair a transmitter station when the attack occurred, officials at the hospital were told.
Missing police trainees
Thirty-five Iraqi men are still missing after being abducted following failed bids to be accepted into a police training academy, police said.
The aspiring police trainees were seized on Monday when their bus was stopped about 50km north of Baghdad after leaving Baghdad for Samarra, Colonel Malik al-Khezraji said.
The missing men travelled to Baghdad among a group of about 230 Iraqis trying to enter a police training academy, but were not admitted and heading home when they were stopped by masked assailants.
Iraqi police and recruits are
routinely targeted by insurgents
Police said they found out about the abduction after a man fled the bus and raised the alarm. The whereabouts of the missing men was not immediately known.
Iraqi police and recruits have been routinely targeted by insurgents determined to destroy Iraq's post-Saddam Hussein reconstruction process
In other violence on Wednesday, Mohammed Sadek al-Batah, a Sunni tribal leader from al-Anbar province was shot dead in a flat in western Baghdad along with a nephew and an associate.
In Saadiya, northeast of Baghdad near the Iranian border, a roadside bombing targeting a police patrol killed four policeman and a civilian.
The US army reported finding the bodies of 11 men in police or army uniforms, in a makeshift grave near Attarmiyah, some 50km north of Baghdad.
All the victims were found bound and blindfolded, but there was no immediate word on when they were killed.
Two US civilians working for a private security firm were killed and a third wounded by an improvised explosive device that struck their vehicle in the southern city of Basra, the US embassy said.
US troops have so far failed to
restore law and order in Iraq
The US military also reported the death of a US soldier of non-combat injuries, bringing the overall toll for US military personnel in Iraq to at least 2242 since the March 2003 invasion.