Gunmen wearing police uniforms abducted the security team near Safwan, a largely Sunni Arab city of 200,000 people in southern Iraq. The attack took place shortly after the Westerners had crossed the Kuwaiti border with a large convoy of supply trucks.
The convoy was traveling on the Iraq Military Road, which is infrequently used by civilian vehicles. Sunni insurgents attack supply convoys on a daily basis, not only on the roads from Kuwait but also from Turkey in the north and Jordan in the west.
Convoys are heavily armed, but not heavily enough. They can be several dozen vehicles long and are often attacked in the middle, their weakest point, reports CBS News correspondent Elizabeth Palmer.
Basra police Maj. Gen. Ali al-Moussawi refused to give details of the ransom demand late Friday after a series of confused and apparently incorrect reports that variously claimed the Austrian had been found dead and one of the Americans was gravely wounded. Another discounted report came from the Basra governor, who had said two Americans were freed and one hostage killed.
Al-Moussawi said police believed the five employees of the Crescent Security Co. were being held in the Safwan region along with trucks from the convoy.
Throughout the day, U.S. officials and the British military, which still has about 7,000 troops in the Basra region, said they had no information on the kidnapped men.
Click here to read Armen Keteyian's report on civilian contractors deployed in Iraq.
The confusion in reports from Iraqi officials apparently grew out of their having been unaware initially of a fresh incident on Friday involving a British security team that had been stopped by Iraqi customs police on the same road where the Crescent Security team was abducted.
In other developments:
Al-Moussawi said that as police checked the papers of the British security men in the lead vehicle, a car drove by at high speed and opened fire, killing one Briton and wounding a second in the car. British officials in Basra confirmed an incident involving security men but would provide no details.
The police major general speculated that Basra Gov. Mohammed al-Waili was not aware of that incident and had assumed the dead and wounded were from the group of five kidnapped the day before.
British soldiers and U.S. military helicopters fought with gunmen in the area where the Crescent Security Group convoy was hijacked, and coalition forces searched for the hostages, according to an official for Crescent Security in Kuwait. He would speak only on condition of anonymity.
British military spokesman Capt. Tane Dunlop said the British and U.S. assault targeted gunmen who had been attacking coalition forces in the past few days. He said the coalition force had been attacked by about 10 gunmen from farm buildings.
The British and U.S. forces returned fire, killing at least two of the gunmen, Dunlop said in a telephone interview from Basra.
In London, a spokeswoman at Britain's Ministry of Defense said, "We were looking to arrest individuals involved in terrorist activities." She said the raid was unrelated to the Crescent Security hostages.
Neither Crescent Security nor the U.S. government has identified the missing Americans.
However, a State Department official informed the family of Paul Reuben, 39, a former suburban Minneapolis police officer who was working as a security contractor in Iraq, that he was among those captured, his brother, Patrick Reuben, told the Star Tribune newspaper and KSTP-TV in St. Paul, Minn.
Relatives identified Paul Reuben, 39, as an "easygoing, fun-loving type of guy" who was ready to come home.
"He had that classic teddy bear disposition that made people like and care about him," St. Louis Park (Minn.) Police Chief John D. Luse said.
Patrick Reuben said his brother had been in Iraq for about two years working for Crescent Security and intended to earn enough money to buy a house and a Hummer and then come home.
Their mother said Friday that she hopes the men holding her son "remember their own mothers."
"I want them to think what it's like for a mother to want her son back," Johnnie Mae Reuben told The Associated Press. "I want my son back."
Crescent Security Group works mostly in Iraq, and its operations are based in Kuwait. Many of its managers and employees are American.
A U.S. Embassy official, who refused to be identified because he was not authorized to release the information, said the hijacked convoy included 43 heavy trucks and six security vehicles. Pentagon spokesman Bryan Whitman said Thursday that preliminary reports suggested the convoy included about 19 vehicles.
The attack took place in Dhi Qar Province, where Italy formally handed over security responsibility to Iraqi forces in late September.
At least 52 Iraqi deaths were reported nationwide Friday. Fifteen were killed by gun or mortar fire and 37 bodies were found dumped with multiple gunshot wounds, many showing signs of torture. The U.S. military also reported the death of one soldier who was killed Thursday in Diyala Province, northeast of Baghdad.
As violence in Iraq continued to spiral out of control, a crisis was brewing for Iraq's Shiite-led government, with an official close to the prime minister disavowing an arrest warrant issued against the country's most influential Sunni leader.
The official, with intimate knowledge of Prime Minister Nouri al-Maliki's thinking, said the Iraqi leader had not known his interior minister was planning to call for the arrest of the revered leader of the Association of Muslim Scholars, Sheik Harith al-Dhari.
"We will work so that the arrest warrant is not acted upon," said the official, who spoke on condition of anonymity because of the sensitive nature of the internal Shiite conflict.
For his part, al-Dhari said the government's bid to arrest him was illegal, and his spokesman urged Sunni politicians to quit the parliament and government.
The brewing political crisis threatened the already shaky al-Maliki government and could provoke an even more violent surge in Iraq's sectarian conflict as the country teeters on the edge of civil war.
The new upheaval began late Thursday when Interior Minister Jawad al-Bolani, a Shiite, announced on state television that he had issued the arrest warrant on grounds that al-Dhari allegedly incited terrorism and violence.
The move enraged moderate members of Iraq's Sunni minority, who had already threatened over recent weeks to walk out of government and parliament and take up arms. They have charged the al-Maliki government with discrimination and failure to act on measures important to the Sunni community and necessary for national reconciliation.
Sunni anger was clear throughout the country with politicians and demonstrations condemning the warrant. A Sunni politician said the Iraqi Accordance Front, a Sunni bloc that holds 44 seats in parliament, will hold a meeting Saturday to discuss how it will react.