The Indian government immediately denied the claim from the pro-Kashmiri independence group Al-Faran, that there had been a gun battle. However, whatever the truth all the hostages are still being held.
Al-Faran did not specify which of the hostages had been wounded in what it said was a 25-minute battle near the town of Pahalgam yesterday morning in which two Indian soldiers were killed and one of the rebels seriously wounded.
Keith Mangan, 33, from Middlesbrough, Paul Wells, 23, from Tooting, south London, and Donald Hutchings, 42, from the United States, were taken hostage on 4 July and Dirk Hasert, 26, from Germany, and Hans Christian Ostro, 27, from Norway, were seized four days later. A second American captive, John Childs, 41, escaped.
The kidnappers, who are demanding the release of 21 separatists held prisoner by the Indian government, delivered a handwritten statement in Urdu to a news agency in Srinagar, the summer capital of Jammu and Kashmir, yesterday.
Their note read: "This morning at 9.00 fierce fighting broke out between the mujahedin and government forces lasting 25 minutes. Two tourists were wounded while one mujahed sustained critical injuries. Two Indian soldiers were killed and many others injured."
The separatists added that they "succeeded in taking the tourists to safety". They criticised the Indian authorities for failing to "exercise restraint" and said "we have already warned the Indian forces not to follow us".
Their account implied that the battle, which allegedly took place in the area where the hostages were abducted, was an unexpected clash between the two sides rather than a planned rescue attempt by the Indians.
However, the Indian government said it was puzzled by the separatists' claim. An official in New Delhi said: "Our information is that the troops were pulling back and not engaging the militants."
In London a Foreign Office spokesman said: "We have spoken to the Indian authorities and we cannot confirm that any such incident took place. It is extremely difficult to distinguish between truth and rumour in these cases." Indian officials alleged on Thursday that 18 of the 20 kidnappers holding the hostages were from Afghanistan and were armed with light machine guns, AK-47 rifles, grenades and communications equipment.
The only good news for the families of the hostages yesterday was that Al-Faran denied that it had renewed its threat to execute them. It said that a fax containing the threat sent to a news agency in New Delhi yesterday was "Indian propaganda". A previous execution deadline last Monday passed without the hostages being harmed.
But the hostage crisis is deadlocked with the Indian government showing no sign of releasing its prisoners. Maulana Fazlur Rehman, a Pakistani politician who offered to mediate, said yesterday that New Delhi had shown little interest in his proposal. The Foreign Office is believed to have asked Pakistan to intervene.
Tourists and terrorists, Magazine