UPDATE 3-Afghans extend deadline for UN hostages.

A Taliban splinter group that has threatened to kill three U.N. hostages again extended a deadline on its demands after the government said it would respond to them on Wednesday, a spokesman for the group said.

The kidnappers have demanded the release of 26 Taliban prisoners, some of whom may be in U.S. custody, as part of a deal to free U.N. workers Annetta Flanigan from Northern Ireland, Shqipe Hebibi from Kosovo and Filipino diplomat Angelito Nayan.

"We have had contact with representatives of the government and the United Nations who said they would respond to the demands tomorrow," Sayed Khalid Agha of the Jaish-e Muslimeen (Army of Muslims) told Reuters on Tuesday.

"So we have extended the deadline until 11 a.m. (0630 GMT) tomorrow."

The three U.N. workers were abducted in Kabul on Oct. 28 after helping to run presidential polls won by U.S.-backed incumbent Hamid Karzai.

Earlier, two other spokesmen for the kidnappers said they had demanded a response by 3:00 p.m. (1030 GMT).

When this, like several previous deadlines, passed Sayed Khalid Agha said it had been set for 11 p.m. (1830 GMT) and if there was no response, the Jaish-e Muslimeen Shura, or council, would make a decision to kill the hostages.

Another militant spokesman, Mullah Sabir Momin, had said Hebibi would be killed first and the "beheading" shown on video. "The decision on the other two will be taken after seeing the reaction of the Afghan government and the U.N.," he said.

Momin said Hebibi seemed the most important hostage. "She says she is a Muslim. If a Muslim helps infidels or America, that Muslim will be punished first."

GOVERNMENT EXPRESSES HOPE

The government has expressed hope for the release of the hostages - two of whom were allowed to call home on Monday - but indicated it was unwilling to meet the kidnappers' demands.

"We know about their ultimatum and our response is that we hope they free the hostages on the basis of the decree of the Ulema and appeals from Afghans and the international community," Defence Ministry spokesman Zaher Azimi said.

In an interview with CNN, Karzai said the government was working hard to secure the release of the workers, adding: "Let's hope they will be free very soon."

Karzai declined to give details of efforts to free the three, but said: "We are working on it on a minute-to-minute basis, day and night."

Both the government and the United Nations have declined to comment on talks, but officials and the U.S. military have said they were hopeful the hostages would be freed.

Momin said the Shura had sanctioned the killing of the hostages in a meeting three days ago, but had extended deadlines in response to numerous appeals, including from leaders of Afghanistan's Mujahideen (holy warriors).

However, he dismissed the appeal from the Ulema, or council of clerics, saying they were "working for the infidels"

Hopes were raised on Monday when Hebibi was allowed to telephone a friend in Kosovo and Nayan spoke to the foreign ministry in Manila. Hebibi said she was well and not being badly treated, a relative said, while an official in Manila said Nayan told the ministry: "Tell my sister I'm OK."

The demand for the release of prisoners from U.S. custody is a significant hurdle given Washington' policy of not cutting such deals. But the Afghan government has in the past negotiated the release of several kidnapped foreigners, some by paying ransoms.