Air Fiji executives are negotiating with the abductors of two New Zealand pilots in a bid to get the men free.
Maurice Parsons of Waiuku and James Henry of Kerikeri were taken hostage by rebels at Savusavu airport on Vanua Levu island this morning.
The two men are beingheld at gunpoint at Savusavu and there has been no word so far on any demands that may have been made.
Lorna Eden, who co-owns a local hotel, saw the two New Zealanders and says they looked unharmed, but worried.
Their capture is part of a wave of unrest since last night's arrest of rebel leader George Speight.
Military spokesman Filipo Tarakinikini says as well as the airline negotiating with the rebels, the military has phoned the rebels and told them they will be arrested if they don't release the New Zealanders.
One man died, forty people were injured and 360 arrested when troops raided a rebel camp near Suva today.
There are reports that up to 50 gunmen are roaming the city of Labasa, which like SavuSavu is on the second largest island, Vanua Levu.
The reports say ethnic Indians are being rounded up by the rebels and taken to the town's military barracks, which were seized by rebels several weeks ago.
New Zealand Foreign Affairs spokeswoman Jocelyn Prasad says the advice to New Zealanders in Fiji could soon be updated, and may contain a stronger warning about the dangers in Fiji.
