The district commissioner of the central Mudug region said talks went on all day Saturday, with clan elders from his area talking by satellite telephone and through a translator with Americans, but collapsed late Saturday night.
"The negotiations between the elders and American officials have broken down. The reason is American officials wanted to arrest the pirates in Puntland and elders refused the arrest of the pirates," said the commissioner, Abdi Aziz Aw Yusuf. He said he organized initial contacts between the elders and the Americans.
Two other Somalis, one involved in the negotiations and another in contact with the pirates, also said the talks collapsed because of the U.S. insistence that the pirates be arrested and brought to justice.
Nineteen American sailors guarded by U.S. Navy Seals reached safe harbor in Kenya's northeast port of Mombasa on Saturday night, exhilarated by freedom but mourning the absence of Capt. Richard Phillips, who sacrificed himself as a hostage to save them.
"He saved our lives!" second mate Ken Quinn, of Bradenton, Florida, declared from the ship deck. "He's a hero."
ATM Reza, a crew member who said he was first to see the pirates board the U.S.-flagged Maersk Alabama on Wednesday. described how the bandits "came on with hooks and ropes and were firing in the air."
He was responding to a throng of reporters shouting questions from shore about the ordeal that began with Somali pirates hauling themselves up from a small boat bobbing on the surface of the Indian Ocean far below.
As the pirates shot in the air, Phillips, 53, of Underhill, Vermont, told his crew to lock themselves in a cabin and surrendered himself to safeguard his men, crew members said.
Phillips was still held hostage in an enclosed lifeboat Sunday by four pirates being closely watched by U.S. warships and a helicopter in an increasingly tense standoff. The lifeboat is out of fuel and drifting.
A Pentagon spokesman said Saturday night that negotiations to free Phillips were continuing.
But Abdiwali Ali Tar said they were deadlocked. "Some local elders as well as our company have been involved in the negotiations but things seem to be deadlocked because the pirates want to make sure to be in a safe location first with the captain - either on one of the ships their colleagues hold or Somali coastal villages - but the Americans will not allow that," said Tar, the head of a private security firm acting as the coast guard in northeast Puntland region, a haven for pirates.
Talks had begun Thursday with the captain of the USS Bainbridge talking to the pirates under instruction from FBI hostage negotiators on board the U.S. destroyer.
It was not clear where the lifeboat was on Sunday. But a statement from Maersk Line, owner of the Maersk Alabama, which Phillips captains, said "the U.S. Navy had sight contact" of Phillips earlier Sunday - apparently when the pirates opened the hatches.
A pirate who says he is associated with the gang holding Phillips, Ahmed Mohamed Nur, told The Associated Press that the pirates say "helicopters continue to fly over their heads in the daylight and in the night they are under the focus of a spotlight from a warship."
He spoke by satellite phone from Harardhere, a port and pirate stronghold where a fisherman said helicopters flew over the town Sunday morning and a warship was looming on the horizon. The fisherman, Abdi Sheikh Muse, said that could be an indication the lifeboat may be near to shore.
The U.S. Navy has assumed the pirates would try to get their hostage to shore, where they can hide him on Somalia's lawless soil and be in a stronger position to negotiate a ransom.
Three U.S. warships were within easy reach of the lifeboat on Saturday, but fears of endangering Phillips' life limit their ability to use their overwhelming firepower. The pirates have threatened to kill Phillips if attacked.
On Friday, the French navy freed a sailboat seized off Somalia last week by other pirates, but one of the five hostages was killed.
Early Saturday, the pirates holding Phillips in the lifeboat fired a few shots at a small U.S. Navy vessel that had approached, a U.S. military official said on condition of anonymity because he was not authorized to discuss the matter publicly.
The official said the U.S. sailors did not return fire, the Navy vessel turned away and no one was hurt. He said the vessel had not been attempting a rescue. The pirates are believed armed with pistols and AK-47 assault rifles.
Phillips jumped out of the lifeboat Friday and tried to swim for his freedom but was recaptured when a pirate fired an automatic weapon at or near him, according to U.S. Defense Department officials speaking on condition of anonymity because they are not authorized to talk about the unfolding operations.
Emphasizing the U.S. stand on bringing pirates to justice, U.S. Coast Guard chief Adm. Thad Allen said Sunday that "an international legal framework" is needed. Speaking on ABC's "This Week" program, Allen said "What you really have to have is a coordinating mechanism that ultimately brings these pirates to court where they can be held accountable."
The United States has signed, but not ratified, the U.N.-sponsored Law of the Sea, which allows signatories to bring pirates arrested in any part of the world to trial in their countries. France, for example, is holding alleged pirates arrested off Somali waters for trial.
U.S. Secretary of State Hillary Clinton has promised to work to get the treaty ratified. The United States originally objected, during the Cold War, that the treaty provisions militated against a free market. More recently it objected to the treaty's regime governing exploitation of minerals of the deep seabed. Lately, treaty critics claim it would impinge on U.S. sovereignty.
In Mombasa, meanwhile, the Alabama crew described how they overpowered the pirates.
Reza, a father of one from Hartford, Connecticut, said that after the pirates boarded, he had led one to the engine room where he stabbed him in the hand with an ice pick and tied him up.
The crew have told family members by phone that they took one pirate hostage before giving him up in the hope their captain would be released. Instead, the Somalis fled with Phillips to the lifeboat.
Maersk President John Reinhart said from Norfolk, Virginia, that the ship was still a crime scene and the crewmen could not leave until the FBI investigates the attack.
"When I spoke to the crew, they won't consider it done when they board a plane and come home," Reinhart said. "They won't consider it done until the captain is back, nor will we."
Other bandits, among hundreds who have made the Gulf of Aden the world's most dangerous waterway, seized an Italian tugboat off Somalia's north coast Saturday as it was pulling barges, said Shona Lowe, a spokeswoman at NATO's Northwood maritime command center outside London.
The Foreign Ministry in Rome confirmed 10 of the 16 crew members are Italian. The others are five Romanians and a Croatian, according to Micoperi, the Italian company that owns the ship.
A piracy expert said the two hijackings did not appear related.
"This is just the Somali pirate machine in full flow," said Graeme Gibbon-Brooks, founder of Dryad Maritime Intelligence Ltd.
In Phillips' hometown, the Rev. Charles Danielson of the St. Thomas Church said the congregation would continue to pray for Phillips and his family, who are members, and he would encourage "people to find hope in the triumph of good over evil."
Reinhart said he spoke with Phillips' wife, Andrea, who is surrounded by family and two company employees who were sent to support her.
"She's a brave woman," Reinhart said. "And she has one favor to ask: 'Do what you have to do to bring Richard home safely.' That means don't make a mistake, folks. We have to be perfect in our execution."
Associated Press writers who contributed to this report include Mohamed Olad Hassan and Mohamed Sheikh Nor in Mogadishu, Somalia; Michelle Faul and Tom Maliti in Nairobi, Kenya; Matt Apuzzo and Robert Burns in Washington; and Ariel David in Rome.