At least 37 people have been killed as police attempted to rescue hostages held by gunmen at a Catholic church in the Iraqi capital, Al Jazeera reported on Monday, according to RIA Novosti.

An attack by an al-Qaeda-linked group, The Islamic State of Iraq, on the Our Lady of Salvation church in the Karrada neighborhood of central Baghdad late on Sunday resulted in more than 100 people being taken hostage.

Police stormed the church two hours later. At least 25 hostages are believed to have been killed. Seven members of the security forces and five gunmen also died.

Iraqi Defence Minister Abdul Qader al-Obeidi was quoted as saying that the attackers` phone calls were "fully intercepted" and said he believed there were foreigners among the group.

According to an Al Jazeera correspondent, the attackers were demanding the release of female prisoners from Iraqi and Egyptian jails.

Before seizing the church, the attackers, who were wearing suicide vests, reportedly attempted to break into a stock exchange building in Baghdad. As a result, two security guards who tried to stop the assailants were killed.

U.S. army spokesman Lieutenant-Colonel Eric Bloom was quoted by Al Jazeera as saying 19 of those who were inside the church when it was attacked managed to escape.

U.S. forces provided air support but no foreign soldiers participated in the storming of the church, he added.

The incident took place two month after last U.S. combat troops left Iraq on September 1, ending a 7-1/2 year military operation. Some 50,000 U.S. soldiers remain in Iraq to train the country`s military, with a full withdrawal expected by the end of 2011.