By Urmee Khan - The Ukrainian vessel, the MV Faina, remains surrounded by several US warships that have been monitoring the pirates' activity and a Russian warship has been sent to the Somali waters.

The pirates are holding the Faina, a few miles off eastern Somalia.

They have demanded $20 million for the release of the vessel and its crew of 13 Ukrainians, seven Russians and one other Eastern European. The ship's captain died of natural causes shortly after the hijacking, the pirates have said by satellite telephone.

President Abdullahi Yusuf of Somalia has now given the US and Russia a green light to take action against the pirates, although there is no sign that military action is imminent.

"I also call on the international community to act quickly on what is happening in Somali waters as well as onshore," he told reporters in the capital, Mogadishu," he said.

"We must do everything we can to stop piracy off the coast of Somalia."

The pirates had imposed an "embargo" against Somalia and other countries by preventing trade and food deliveries, he said.

The vessel, which was hijacked last Thursday, is carrying Soviet-era T72 battle tanks and other military equipment believed to have been en route for autonomous south Sudan, but the shippers and the Kenyan government claim they are theirs.

The defence chiefs of eight European Union countries joined the fight on Wednesday, agreeing to move towards creating a maritime security force against piracy, French defence minister Hervé Morin said in Paris.

Russian navy spokesman Igor Dygalo said Russian commanders hope for a peaceful end to the hijacking.

"Taking forceful measures, for obvious reasons, is an extreme measure, as this could create a threat to the lives of the international crew of the cargo ship," he said.

There have been more than 60 other pirate attacks this year on ships off Somalia and in the nearby Gulf of Aden.

The Horn of Africa provides a vital global trade route, linking Europe to the Middle East and Asia, but is one of the most pirate-infested waters in the world. Around 30 vessels have been seized this year, and two Malaysian ships were released this week after ransoms were paid by their owners.

MOGADISHU (AP) Somali pirates who hijacked a ship laden with tanks and heavy weapons stared down United States warships and helicopters again yesterday, making no move to withdraw their R166 million ransom demand or give up after a seven-day stand-off in the Indian Ocean.

The hijacking of the Ukrainian cargo ship, the MV Faina - carrying 33 Soviet-made T-72 tanks, rifles and heavy weapons, which US defence officials have said include rocket launchers - was the highest-profile act of piracy in the waters off Somalia this year.

The US Navy says it wants to keep the arms out of the hands of militants linked to Al-Qaeda in Somalia, which is a key battle ground in the war on terrorism.

To that end, it has surrounded the Faina, anchored off the central Somali town of Hobyo, with half a dozen ships, including guided missile destroyer USS Howard, which has sophisticated weapons and monitoring equipment.

Celebrating

An official in Washington, speaking on condition of anonymity, said he believed that disagreements among the pirates had led to a shootout on Monday night that might have killed three pirates.

He would not elaborate on how United States officials had heard this information, and US defence department spokesman Geoff Morrell said he could not confirm the shootout report.

The shootout and deaths were also reported by a Kenyan seafaring group, which said it had received the information third-hand and could not independently confirm it.

Yet a spokesman for the pirates denied there had been a shootout, saying that they had been celebrating the Islamic holiday that marked the end of the holy month of Ramadan.

"We are happy on the ship and we are celebrating (Eid al-Fitr)," said spokesman Sugule Ali. "We didn't dispute over a single thing, let alone have a shootout." Piracy is a lucrative criminal racket in the region, bringing in tens of millions of dollars a year. There have been 24 reported attacks in Somalia this year, the International Maritime Bureau has said