Sept. 29 (Bloomberg) -- U.S. warships closed in on a ship carrying a cargo of battle tanks, seized by pirates off the coast of Somalia, after the captain died of a heart attack. The pirates are demanding a $20 million ransom.

``I see American warships less than one mile away, and we are anchored seven miles from shore,'' Viktor Nikolsky, the acting captain of the Faina said by satellite telephone from the ship's deck. A Russian warship, the Neustrashimy, or Intrepid, is also bound for the region.

Somali pirates seized the Faina, a Belize-flagged vessel with a crew of 17 Ukrainians, three Russians and one Latvian, on Sept. 25, the Ukrainian Foreign Ministry said. It was carrying at least 30 Soviet-designed T-72 tanks to Kenya.

The Faina's Russian captain, Vladimir Kolobkov, died after the pirates seized the ship, Nikolsky said. He added that there are currently about 50 armed pirates on board, and confirmed there are about 20 crew.

``The negotiations will start, not yet started,'' Nikolsky said, speaking in broken English. ``I call on that the negotiation will be success, if not I will not sure what will be with my crew. They are demanding 20 million U.S. dollars for liberation.''

A spokesman for the pirates, Sugale Ali Omar, speaking yesterday on the same satellite phone on which Nikolsky was reached today, confirmed this figure.

Ransom Demands

``We are demanding $20 million for this ship because it has many assets on board,'' Omar said. ``We are not going to offload the weapons, but our objective is to find the ransom.''

``Two big warships are patrolling around us and several planes flew at low altitude overhead, but they didn't hurt us,'' Omar said. ``In case they try to take any military action, we will fight against them until the last one dies.''

The U.S. has several ships in the area shadowing the Faina, which is anchored off the Somali coast near the port city of Hobyo, near two other pirated ships, Lieutenant Nate Christensen said by telephone from Bahrain.

In a statement yesterday, the U.S. Navy said the destroyer USS Howard was within visual range of the ships. Christensen wouldn't say how many naval ships are now in the vicinity or say if any special forces are on board. French naval commandos two weeks ago freed a French yacht that had been taken by Somali pirates.

``We are deeply concerned about making sure the cargo doesn't fall into the wrong hands,'' Christensen said. ``The safety of the crew is also of paramount concern.''

No Surrender

Omar vowed not to surrender. ``If they destroy all the assets and the crew members on board, we are also ready to die with them,'' he said. ``It will not happen that they capture us like goats.''

The pirates are in negotiations with the ship's owners on releasing the ship and its crew, Omar said. They originally demanded a ransom of $35 million before dropping this to $5 million and then raising it again to $20 million, Russian state broadcaster Vesti-24 said.

Christensen said the U.S. Navy isn't involved in the ransom negotiations.

Attacks by Somali pirates in the Gulf of Aden and off Somalia on ships traveling to and from the Suez Canal have led companies to ask for military intervention by the United Nations and to warn that they may start routing vessels around Africa, increasing costs and risking rougher seas. French President Nicolas Sarkozy also has called for an international response.

Multiple Hijackings

Ships using the Suez Canal to travel between Europe and Asia must pass through the gulf. In the first half of this year, 21,080 vessels used the Egyptian canal, a tenth of the world's seaborne trade.

Somali pirates released a Malaysian chemical tanker on Sept. 27 after a $2 million ransom was paid. They also hijacked a Greek chemical tanker on Sept. 26 and freed a Japanese-owned ship and its 21-member crew after a ransom was paid.

Almost 60 ships have been attacked so far this year in the Gulf of Aden and along Somalia's east coast. In the week from Sept. 16 to 22, pirates hijacked four ships with a total of 66 crewmembers, according to the latest weekly report of the International Maritime Bureau. Another three commercial ships managed to deter attacks that week.

``No link between the pirates and al-Qaeda type groups has ever been established, but the possibility that one could develop is something that concerns the intelligence community,'' Fred Burton, vice-president for counter-terrorism and corporate security at Austin, Texas-based risk-management company Stratfor, said in a telephone interview. ``The East Coast of Africa is an area that's feared as a safe haven for Jihadi groups.''

To contact the reporter on this story: Hamsa Omar in Mogadishu via the Johannesburg newsroom at pmrichardson@bloomberg.net; Sebastian Alison in Moscow at Salison1@bloomberg.net

Last Updated: September 29, 2008 11:29 EDT