Witnesses said gunmen accosted Ihab al-Sherif as he stopped to buy a newspaper late Saturday, pistol-whipped him and accused him of being an ``American spy.'' The kidnapping could undermine US-backed efforts to encourage Iraq's Arab neighbors to send high-ranking diplomats to Baghdad.

The abduction occurred hours before US Attorney-General Alberto Gonzales paid a heavily guarded surprise visit to Iraq. Gonzales praised Iraqi's commitment to democracy in the face of sustained deadly attacks by insurgents.

In violence Sunday, a car bomb killed three Iraqi policemen north of Baghdad, while two US soldiers were wounded in a suicide attack near a checkpoint in the volatile western city of Ramadi.

Also in Ramadi, a US military helicopter caught fire Saturday night, destroying the CH-47 Chinook helicopter and injuring one crewman, the US military said Sunday.

Two Egyptian diplomats, speaking in Cairo and Baghdad on condition of anonymity because of the sensitivity of the issue, said al-Sherif was kidnapped late Saturday in the Iraqi capital. Al-Sherif has been in Iraq since June 1.

Last month, the Egyptian government said it would upgrade its mission in Iraq to full embassy status headed by an ambassador, which would have made al-Sherif the first Arab ambassador to Iraq's new government. It was not immediately clear if al-Sherif had been given the ambassadorial title.

The posting of more senior diplomats to Iraq is seen as a key step to restoring confidence in the country's transitional government, which is struggling to control a raging insurgency believed to be led by Sunni Arabs.

A leading Sunni organization called for al-Sherif's immediate release.

Three Iraqis who claimed they witnessed the attack said al-Sherif was driving alone in a vehicle with diplomatic license plates when he stopped to buy a newspaper from a store on the Rabie Street in Baghdad's western al-Jamaa neighborhood.

About eight gunmen surrounded him, the witnesses said on condition of anonymity because they feared reprisals. One of the gunmen struck the diplomat on the head with a pistol butt as others shouted that he was ``an American spy,'' the witnesses said.

They shoved him into the trunk of a car and sped away. Bystanders reported the incident to a passing American convoy and said US soldiers searched al-Sherif's car, which was removed Sunday.

Al-Sherif was the second Egyptian diplomat to have been kidnapped in Iraq since the US-led invasion toppled Saddam Hussein's regime in 2003.

Mohammed Mamdouh Helmi Qutb, then Egypt's third-ranking diplomat, was seized June 23, 2004, by Islamic militants who claimed they wanted to deter Egypt from deploying troops in Iraq. He was freed a month later after Egypt reaffirmed it had no intention of sending soldiers to Iraq.

ASSOCIATED PRESS