The embassy's Hostage Working Group (HWG) said in a document obtained by Aljazeera.net that: "More than 439 foreign nationals have been kidnapped ... over three every week". It said that 17 were women.
Sixty-five per cent of hostages were released, 18% killed and 17% of cases remained unsolved.
Those who regained their freedom were ransomed or rescued. Some also escaped or were freed by their kidnappers, the document said.
People from more than 60 nationalities have been captured, with Turks, Jordanians, Americans, Lebanese and Egyptians topping the list.
The hostages were first and foremost contractors for the US-led forces, business people and workers (165), followed by truck drivers (63), journalists (39), humanitarian workers (23) and diplomats (15).
Iraqis are the prime targets with between five and 30 snatched a day, the report said.
Most cases are solved through payment of a ransom that usually ranges from $10,000 to $50,000.
But the report quoted instances of hundreds of thousands of dollars paid out to abductors.
"While many ransom payments go to criminal gangs, a significant amount of ransom money goes to insurgent or terrorist groups," the document said, in reference to Iraqi hostages.
The Times newspaper in Britain said last week that France, Germany and Italy had paid about $45 million to obtain the release of hostages kidnapped in Iraq, despite denying it in public.
Several other governments, including Jordan, Romania, Sweden and Turkey, were also said to have paid for their hostages to be freed, along with some US companies with reconstruction contracts in Iraq.
Britain has never paid to free its citizens, but it is understood to have paid intermediaries "expenses" for their efforts to make contact with the kidnappers, The Times said.
There are more than 150,000 foreign troops deployed in Iraq, the vast majority are American.
Thousands of Iraqi policemen and soldiers have also been trained by the US-led coalition.
Despite the massive deployment of force, the country is plagued by killings and lawlessness.