The main militant group in Nigeria's Niger Delta region says it has located a kidnapped Israeli businessman, but has rescinded its offer to help rescue him.

Nigerian police say gunmen kidnapped the Israeli businessman from his home in the Niger Delta's main city, Port Harcourt, late Tuesday.

In a statement sent to reporters Thursday a spokesman for the Movement for Emancipation of the Niger Delta says it is now demanding an apology from Israel National News, a broadcast service which described MEND as a terrorist group.

The MEND statement says it will now plead with the businessman's captors to be human but will not otherwise intervene.

On Tuesday, the group had said it was not involved in the Israeli man's kidnapping and offered to help secure his release.  

The Israeli Foreign Ministry says it is doing everything it can to secure the man's release as quickly as possible. 

Rivers state police say the victim's driver has been arrested on suspicion he was involved in the abduction.

More than 200 foreigners have been kidnapped in the oil-producing region since 2006.  Most have been released unharmed for a ransom.

Militants have carried out attacks and kidnappings in the Niger Delta as part of a campaign to direct more oil revenue to local communities. 

Criminal gangs in the region have also exploited the situation and carried out kidnappings for ransom.

The government has deployed a military joint task force to the Niger Delta region to counter attacks that have reduced the nation's oil production. 

Some information for this report was provided by Reuters.