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Peshawar: Militants will start killing a group of hostages on Saturday if the government does not release several insurgent prisoners, a Pakistani Taliban spokesman said.
A suspected militant leader is among those the Taliban want freed.
Maulvi Umar claimed on Friday the Taliban had kidnapped 29 people, most of them security forces. However, Hangu district official Haji Khan Afzal said only 16 or 17 people were being held.
The two sides have been negotiating over the captives, who Afzal said were taken in the wake of a militant siege of a local police station earlier this week in the country's volatile northwest.
Officials said more than 100 militants surrounded the Doaba station to demand their associates be freed, and the siege ended after army troops appeared.
But the militants have not dropped their demands.
Umar insisted the government release seven militant prisoners, including a suspected top insurgent known as Rafiuddin, by Saturday afternoon or the hostages would be slain.
"It's our final warning," Umar said.
On Thursday, Interior Ministry chief Rehman Malik announced the arrest of Rafiuddin, an alleged deputy to top Pakistani Taliban commander Baitullah Mehsud in South Waziristan.
South Waziristan is a Pakistani tribal region considered a haven for Taliban- and Al Qaida-linked fighters, many of whom are believed involved in attacks in neighbouring Afghanistan.
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