A statement apparently released by a group called the Iraqi Islamic Secret Army gave Canberra 24 hours to withdraw its troops from Iraq.
The statement, released on Monday in the town of Samarra, north of Baghdad, said two other people described as East Asians had also been abducted.
It said the four were seized after rebels attacked a convoy of civilian cars on the highway between Baghdad and Mosul in the north.
It added that Australian Prime Minister John Howard had to announce the withdrawal of troops personally.
“We tell the infidels of Australia that they have 24 hours to leave Iraq or the two Australians will be killed without a second chance,” the statement said.
But Howard stood firm against the withdrawal of troops, saying: “We do not bow to terrorist threats.”
Foreign Minister Alexander Downer said he believed all Australians in Iraq had been accounted for and companies working there were running checks on all their employees.
A car bomb attack at Australia’s
“At this stage, we can find no evidence about any Australians missing or … kidnapped, but nevertheless we have got to be cautious in what we say because further information could turn up as the day goes on,” Downer told Australian television.
Howard called on Australians to contact their relatives in Iraq to check their safety, but said the fact no names, photographs or video tape had been released was a good sign.
“It’s encouraging that the people have not been named, because often when hostages are taken they carry their papers with them and therefore they can be identified,” he said.
“On the other hand, there are a lot of people working in security, private security firms, in Iraq, and not all of them may be registered with the Australian embassy.”
Australia, a close US ally, was rocked by a car bombing outside its embassy in Jakarta, Indonesia on Thursday, killing nine people and injuring 182.
The blast was blamed on the al-Qaida linked Jemaah Islamiyah (JI) group.
In an internet statement at the weekend that could not be verified, the JI warned Australia of more attacks if it did not withdraw its troops in and around Iraq.
Australia was a participant in last year’s US-led invasion of Iraq and still has 850 troops there.
Canberra goes to the polls on 9 October for a general election in which Iraq has become a major issue.