RIYADH, July 14: A Saudi company said on Wednesday it would pull out of Iraq to meet the demands of kidnappers holding an Egyptian truck driver hostage.

"We are withdrawing from Iraq immediately to save the life of our driver Mr (Mohammed) Gharabawi," Faisal al-Neheit, owner of the Faisal al-Neheit Transport Company told Reuters.

"We ask them to release him immediately," Neheit earlier said in an appeal on Arabic satellite television Al Jazeera. On Tuesday, the channel showed a video tape of armed men threatening to kill Gharabawi within 72 hours if the Saudi firm did not pull out of Iraq.

The Saudi firm has offered the kidnappers $15,000 for Gharabawi's release, but said it was unable to pay the $1 million ransom demanded. Gharabawi, who has worked for the firm for eight years, was seized while transporting Saudi fuel to Iraq about two weeks ago. Several Iraqi militant groups have kidnapped foreigners in recent months and have either released or killed hostages.