DUBAI, Sept 29 (AFP) - The Islamic Army in Iraq, holding two French hostages, praised France's stand after it called for a US-proposed conference to address the issue of a US troop withdrawal, in a statement Wednesday on the Internet.  

"The Islamic Army in Iraq pays tribute to the French government for its positive initiative towards the Iraqi people despite its deplorable history," said a statement posted on the group's website.  

"We hope this heralds a new era of comprehension of our causes and respect for our priciples," added the statement posted on the website (http://www.koolpages.com/992ali/index.htm).  

The statement, however, made no reference to hostages Georges Malbrunot and Christian Chesnot, held by the group since August 20.  

A French national who claims he has secured a deal for the captives' release said Wednesday that he was waiting for US authorisation to extract the pair by air.   "I have met the two hostages ... The release is a done deal, without any ambiguity. There have been no negotiations, and no compensation," Philippe Brett, who was in Iraq, told AFP by telephone.  

The French foreign ministry has so far denied any knowledge of an agreement to free the Frenchmen.  

France, which took the lead in opposing the US-led intervention in Iraq, said Monday that while it was not against the US proposal for an international conference, any meeting should also discuss the withdrawal of US-led forces and include the armed opposition.