Maritime officials in the region could not confirm that.

Pirates on the MV Faina, reached by Reuters via satellite phone, said they were no longer speaking to media despite giving numerous interviews in the last two weeks.

In the highest-profile of scores of pirate attacks off Somalia this year, the Faina has been held since the end of September with 20 crew members on board.

Its cargo of military equipment includes 33 T-72 tanks which were en route to Kenya`s Mombasa port.

U.S. navy warships are watching the ship, which lies offshore near Hobyo town, guarded by about 50 pirates.

"The pirates on board the Ukrainian ship have struck a bargain of $8 million ransom," added Farah, who has given reliable information in the past about pirate activities.

"I think the Americans are aware of the deal because there is no other alternative to release the ship. If the warships threatened, pirates would die in a last-ditch fight and risk the hostages," he said.

The MV Faina saga has galvanized international concern over piracy in the busy shipping lanes of the Gulf of Aden and Indian Ocean waters off Somalia.

The U.N. Security Council Tuesday again urged countries with naval ships deployed around the Horn of Africa to take action against the pirates. They have reaped millions in ransoms this year and pushed up insurance costs for ships.

Farah scoffed at the international threat.

"The world has repeatedly voted to fight pirates, but if the situation were a piece of cake, then the American ship would not just be watching the Ukrainian ship," he said.