Reports of the kidnappings turned out to be false, but by this time the rumors had spread rapidly around the country -- and to the international press.
David Hartwell, Middle East editor at "Jane's Sentinel Security Assessments," says the incident indicates how strong the power of rumor is in the country.
"The culture is such that people would tend to trust what their neighbor tells them and [what] their friends and family tell them more than what they are told by the government. That's a cultural thing. And so, you can find that rumors spread like wildfire because that's the culture of the society," Hartwell says.
Rumors spread especially easily in a country where telephones are unreliable and roads are often blocked. With these limitations, it is hard sometimes for people to distinguish between fact and fiction.
Many people have good reason to believe the worst. Kidnapping has been common in towns such as Madain, which has a mixed Sunni and Shi'ite population.
People often tend to believe conspiracy theories, more than government explanations. Some rumors suggested that U.S. troops or the CIA were involved in the supposed hostage taking in Madain.
Abu Mus'ab al-Zarqawi, the Jordanian terrorist who is Iraq's most-wanted man, said that the kidnappings were a fabrication by Iraqi and U.S. authorities to spread unrest.
Hartwell says the real issue for the United States is not whether the rumors are true, but the fact that people are prone to trust them. He says this distrust is connected with general fatigue with the occupation.
"Most Iraqis do realize that the Americans need to be in Iraq for the security situation, but most don't really want them there. It's a kind of a lesser evil if you like. So it's not surprising that there is a lot of anti-American conspiracy theories flying around," Hartwell says.
It is clear, from the Iraqi government's response to the supposed kidnappings, that the Iraqi people are not the only ones to fall for rumors.
The Iraqi parliament discussed the incident yesterday. Interim Prime Minister Iyad Allawi said the Al-Qaeda terrorist group in Iraq had seized hostages to try to provoke a Sunni-Shi'ite civil war.
And Iraq's most revered Shi'ite cleric, Grand Ayatollah Ali al-Sistani, called government officials and urged them to solve the crisis in Madain peacefully.
The rumor mill is also indicative of the distrust between various Iraqi communities.
Yahia Said, a researcher specializing in Iraq at the London School of Economics, says the incident indicates that tensions are high between the Sunni and Shi'ite communities:
"It indicates that there is a new stage, if you like, and attempts to foment sectarian tension, sectarian violence. And it is just another step, another level in such attempts. I think the public, from the reaction to it, is clearly perceptive to the idea that there could be even more outrageous interethnic attacks," said Said.
Said says that some resistance groups and political parties encourage violence and play the sectarian card in an attempt to grow stronger.