Ihab el-Sherif, the head of mission, was cornered by gunmen in cars as he came out of a shop after buying a newspaper on Saturday evening and had not been heard from since, the diplomat told Reuters on condition that he was not identified.

"The motives are believed to be political," he said, noting that Iraq's foreign minister had said just last week that Egypt would become the first Arab state to appoint a full-ranking ambassador to Baghdad since the fall of Saddam Hussein.

The Egyptian Foreign Ministry, which said it was "checking reports" Sherif had "disappeared," has yet to confirm it plans to upgrade his post. The Baghdad mission had no comment.

An upgrade to full ambassadorial status for Sherif on the part of Egypt, the most populous and traditionally most powerful Arab state, could enhance the standing of a new Iraqi government many Arabs view with suspicion because of its backing from the United States and sectarian ties to Shia Iran.

"He was buying a newspaper on Saturday evening when two BMWs full of gunmen blocked his way and kidnapped him," the diplomat told Reuters, saying there had been no word from the kidnappers.

It appeared the envoy had been on his own, he said.

More than 200 foreigners and thousands of Iraqis have been kidnapped in the chaos that followed the US invasion of Iraq in 2003. Some have been killed. Many have been released after the payment of ransoms to criminal gangs.

Others have been taken by insurgents from Iraq's Sunni Arab community -- a minority in Iraq but the majority in most other Arab states -- who have made political demands.

A senior Egyptian diplomat was kidnapped in the Iraqi capital a year ago and released unharmed after several days. Those kidnappers released a statement condemning an Egyptian offer of assistance to the US-installed Iraqi government. Full details of the incident, however, were never made public.

The kidnapping of the envoy was an uncomfortable reminder of insecurity in Iraq as the new, Shia-led government strives to encourage foreign investment following a tour abroad last month by Prime Minister Ibrahim Jaafari and other ministers.

A suicide bomber killed up to 20 people, mostly would-be police recruits, in Baghdad on Saturday morning, close to the main government compound in the capital.

In late evening, two suicide bombers struck at police and Iraqi soldiers in the mainly Shia town of Hilla, to the south, killing nine people and wounding 33, police said.