An official at the Swiss embassy in Baghdad has said two Swiss hostages have been freed in southern Iraq.
It is reported the two were employees of a non-governmental organisation and were abducted two days ago. Both are said to be in good health.
Meanwhile, US forces in Iraq say they killed 36 insurgents in fierce fighting in the Sunni Muslim stronghold of Fallujah yesterday.
The US military says the battle started yesterday morning when up to 60 insurgents attacked US marines with small arms and rocket-propelled grenades.
The marines responded with small arms and mortar fire with air support, according to a coalition statement. Three US marines were said to have been wounded in the clashes.
The fighting threatens a ceasefire that came into effect in the city last Monday.
Renewed warning from US military
Separately, US military commanders have renewed their warning that more attacks against so-called soft targets are likely before the transfer of sovereignty to an Iraqi-led provisional government on 30 June.
The warning follows yesterday's bombings in the southern city of Basra in which 68 people, including 20 children, were killed.
The al-Qaeda terrorist group is being blamed for the attacks.
A US military spokesman, Brigadier-General Mark Kimmit, said the rise in violence would not achieve its aim or deflect coalition forces from doing their duty.
