The top Algerian diplomat in Iraq, Ali Balarousi, and a colleague have been kidnapped in Baghdad.
A colleague said kidnappers were lying in wait for the diplomats
Police say the two were seized outside a restaurant in the western Mansour district by attackers in two cars.
Fellow diplomat Abdel Wahab Fellah said he saw the kidnapping - which he called well-planned - but could not stop it.
The capture follows the abduction and killing earlier this month of Egypt's ambassador-designate in Iraq, which insurgents say they carried out.
Mr Fellah told the AFP news agency he was nearby when his colleagues were seized: "I was on the other side of the main road when I saw people in two cars pull them out of their land cruiser and take them.
"They must have been waiting for them. I couldn't do anything. I just called the police," he said.
Algeria and the United States have condemned the seizure of Mr Balarousi and fellow diplomat Azzedin Belkadi.
Mr Balarousi, Algeria's charge d'affaires in Baghdad, has been stationed in Iraq for nearly two years. Mr Belkadi arrived last month.
Attacks on diplomats
Since the kidnapping of Egyptian diplomat Ihab al-Sherif, gunmen have attacked vehicles carrying Pakistani and Bahraini diplomats in Iraq.
ATTACKS ON ARAB ENVOYS
21 July 2005: Algerian mission chief Ali Balarousi and an aide are abducted
5 July: Bahraini envoy Hassan Malallah al-Ansari is shot and wounded during an apparent abduction attempt
2 July: Egypt's ambassador-designate Ihab al-Sherif is abducted; he is later killed
24 July 2004: Militants briefly kidnap Egyptian diplomat Mohamed Mamdouh Qutb
Officials say insurgents have launched attacks on diplomats to try to dissuade Arab countries from raising the level of their diplomatic representation.
Egypt's decision to designate Mr Sherif an ambassador made Egypt the first Arab country to upgrade ties with Iraq.
The US has been encouraging Arab countries to appoint ambassadors to Baghdad in an attempt to strengthen the new state and undermine the insurgency.
Forty-six countries have foreign missions in Iraq, according to Iraq's foreign ministry.
Day of violence
Meanwhile, at least eight Iraqis have died in a series of attacks by insurgents in and around Baghdad.
A suicide car bomber attacked an army patrol in Mahmoudiya, 30km (19 miles) south of the capital, killing five soldiers and wounding nine.
A policeman was killed and eight others wounded by a car bomb in the capital, and two civilians died in a separate attack in the city.