leader said they were ready to release one of the Italians if the state accepts two of their demands before the start of negotiations.
The caller, claiming to be Sunil, known as rebel leader Sabyasaachi Panda, urged the government to release five Maoists, including his wife Subhashree Panda, in exchange for an Italian.
In a telephonic message to select journalists in Bhubaneswar, he also demanded action against security personnel responsible for alleged staged shootouts and rapes in the state.
"Unless the rebels make it clear who will represent them, it is very difficult to start talks," a senior official in the home department said.
The government has not responded to the Maoists swap offer.
The rebels late Tuesday extended the deadline for the government to accept their demands to Wednesday evening. But the process suffered repeated setbacks over the choice of interlocutors.
The Maoists late Monday announced three names - senior rebel leader Narayan Sanyal, social activist Dandapani Mohanty and rights activist and lawyer Biswapriya Kanungo -- to mediate on their behalf.
While Kanungo immediately said no, chief minister Naveen Patnaik Tuesday evening refused to accept Sanyal as he had been convicted for life in a criminal case.
Patnaik asked the rebels to suggest alternatives.
The Maoists then announced that human rights activist Prafulla Samontra and tribal expert BD Sharma. But Samontra refused to participate, saying he had no faith in the government.
Samontra, who has been agitating against displacements by industrial projects, said the government did trust him or his movement.
"There is no meaning talking with the government," he said.
The government said three senior officials - PK Jena, Santosh Sarangi and UN Behera - will represent it in the negotiation process.
Bosusco Paolo and Claudio Colangelo were abducted by Maoists March 14 from Kandhamal district. The government and the rebels said the hostages are safe and in good health.
The abductors have come up with 13 demands.