Two diplomats, speaking in Cairo and Baghdad on condition of anonymity because of the sensitivity of the issue, said Ihab al-Sherif was captured late on Saturday in the Iraqi capital.
Al-Sherif, 51, had arrived in Baghdad on 1 June.
The ambassador parked his car in front of a food store and a newspaper shop and had walked around 20 metres when two cars screeched to a halt and seven armed men jumped out, a witness, who declined to be named, said on Sunday.
The diplomat began to shout, drawing the attention of people in the stores. When they looked to see what was happening, a kidnapper shouted in Arabic: “This is a f*$%£*g American!” one of the shopkeepers said.
Egyptian diplomats are in touch
The abductors pistol-whipped Sherif, causing him to bleed
heavily, then bundled him into the trunk of one of the cars and sped off at around 5pm (1300 GMT).
The Egyptian Foreign Ministry confirmed the diplomat was missing and said “contacts are under way with the Iraqi government and all other sides to clear up the truth about the disappearance of ambassador Ihab al-Sherif”.
In mid-June, the Egyptian government said it would upgrade relations with Iraq to full embassy status headed by an ambassador, but it was not immediately clear if al-Sherif currently held the full ambassador title.
The capture could undermine US-backed efforts to encourage Iraq’s Arab neighbours to send high ranking diplomats to Baghdad.
The posting of more senior diplomats to Iraq is seen as a key step to restoring confidence in that country’s fledgling transitional government, which is struggling to control violence.
The diplomats said other Egyptian diplomats in Baghdad were in contact with “some Iraqi dignitaries” seeking information on the capture.
Three Iraqis who said they witnessed the capture in Baghdad’s western al-Jamaa neighbourhood said armed men accosted al-Sherif as he stopped to buy a newspaper in Rabie Street, beat him and accused him of being an “American spy”.
The witnesses, speaking on condition of anonymity citing security concerns, said al-Sherif was driving alone in a vehicle with diplomatic licence plates when about eight attackers surrounded him.
“Contacts are under way with the Iraqi government and all other sides to clear up the truth about the disappearance of ambassador Ihab al-Sherif”
One struck al-Sherif on the head with a pistol butt before he was shoved into the trunk of a car that sped away, the witnesses said.
Bystanders reported the incident to a passing American convoy; US soldiers searched al-Sherif’s car, which was removed on Sunday.
No group has claimed responsibility for the abduction but it may be linked to Cairo’s latest move to help in Iraq’s political reconstruction, which fighters are bent on derailing.
Egypt training Iraqis
Egypt has been training Iraqi security forces and civil servants under a US-backed international programme and on Friday about 140 Iraqi civil servants arrived in Cairo.
Al-Sherif had served as charge d’affairs in Syria and Israel before being transferred to Iraq and is the second Egyptian diplomat to have been captured in the country.
Muhammad Mamdouh Helmi Qutb, then Egypt’s third-ranking diplomat, was briefly detained in July 2004 by a group of fighters who claimed they wanted to deter Egypt from deploying troops to Iraq.
Egypt had withdrawn its ambassador in 1991 when it backed the US-led alliance against Saddam Hussein, after he invaded Kuwait.