Two Austrians held hostage by al Qaeda in the Sahara desert since February are alive and negotiations to obtain their release are making progress, a senior Malian official said.

The couple, Andrea Kloiber, 43, and Wolfgang Ebner, 51, disappeared in February while on holiday in Tunisia.

Al Qaeda's North African wing said it had kidnapped them, and demanded the release of 10 Islamic militants held in Tunisia and Algeria. Algerian security sources said the captors also wanted a cash ransom.

A high-level official in Mali, in whose remote desert north the two Austrians were originally reported held, rejected rumours circulating in neighbouring Algeria that the two might have been killed by their captors.

"I can tell you that it is not true," said the official, who is following the hostage case but asked not to be named. "It's a pity to see that their detention is lasting so long, it's hard for them and their families. But I can assure you that the negotiations are advancing and advancing well," he said. "We think that in the near future they will regain their freedom," the official added, without giving details.

Austrian government officials said last month they were continuing to work to free the two hostages, despite reports that a Tuareg intermediary negotiating their release had been shot dead.

The remote area where the Austrians were thought to be held has been the scene in recent months of clashes between the Malian army and Tuareg rebels. Some reports have suggested the captives may have been taken over the border into Niger.

An al Qaeda statement posted on the Internet last month said the group was now only seeking the release of a Muslim couple held in Austria, and that Austria was responsible for the fate of its citizens after a deadline expired. But it was not clear if this statement came from the captors themselves.