Somali gunmen on Tuesday kidnapped two foreign contractors working for a project funded by the United Nations in southern Somalia, one of their colleagues said.

Local militias were pursuing the kidnappers with the hope of freeing the captives, residents said.

"One Briton and one Kenyan working for the U.N.'s FAO (Food and Agriculture Organisation) were kidnapped by clan militiamen somewhere between Bule and Sakow towns in Middle Jubba province," a Somali aid worker, who asked not to be named, told Reuters.

"We understand that the British man was wounded during an exchange of gunfire between the Somali bodyguards and the militia," he said.

He said the two had been working for the FAO-funded Somalia Water and Land Information Management project.

FAO officials in Rome and a British Foreign Office spokesman in London said they were investigating the report.

Local elders and militiamen were pursuing the kidnappers toward Jilib district, 280 km (174 miles) south of Mogadishu.

"We are still chasing the kidnappers. We are determined to free the hostages," resident Mohamed Abdirisak said by phone.

Kidnapping is a lucrative business for Somali criminals, who are known for treating their captives well - viewing them investments upon which they expect to earn a handsome return in the form of ransom.