Iran today urged Ireland not to pay a €5 million ransom demanded by kidnappers for Irishman Mr Aidan Leahy.
Iran has accused drug smugglers of kidnapping Mr Leahy and two Germans as they cycled through the southeastern province of Sistan-Baluchistan earlier this week.
A local journalist in Zahedan, the provincial capital, said the kidnappers had taken the hostages across the border to Pakistan, but this could not be confirmed.
The journalist said he got his information from the relatives of people close to the kidnappers.
Interior Minister Mr Abdolvahed Mousavi Lari said the government had received information about the kidnappers and was acting on it.
"Intelligence forces have obtained some clues. We hope to settle the problem soon," Mr Lari said.
A senior provincial official, Mr Gholam Reza Javdan, said an anonymous caller to police has demanded five million euros for the hostages' release.
"We are determined not to give in to the demands of the bandits and won't pay ransom to the kidnappers at all," Intelligence Minister Ali Yunesi said after a Cabinet meeting. "We also call on the German and Irish governments not to give any concession or ransom to the drug traffickers."
The journalist, who said he saw the tourists cycling through Zahedan before they were kidnapped, believed the kidnappers had taken them out of Iran for safe keeping while the ransom is awaited.
"The kidnappers took their hostages to Pakistan, where the tourists will be held by local Pakistani tribes close to the kidnappers until ransom is paid," he said.
He said the hostages were seen being taken to Mirjaveh late last night.
Mirjaveh is six miles west of Iran's border with Pakistan and Zahedan is about 60 miles west of the border.
Drug smugglers and bandits are known to cross the border regularly, operating in terrain where there is little government control.
AP