BAGHDAD (AFP) - Islamic militants beheaded a US citizen and threatened to repeat the gruesome spectacle in 24 hours by executing one of the dead man's British or American colleagues if female prisoners were not released across Iraq.
Tawhid wal Jihad (Unity and Holy War), the radical movement of suspected Al-Qaeda agent Abu Mussab Zarqawi, posted grainy footage on an Islamic website of the killing of Eugene "Jack" Armstrong, one of three foreign contractors grabbed at gunpoint last Thursday from their home in an upscale Baghdad neighborhood.
A US official in Washington said that Armstrong's decapitated body had been found Monday by Iraqi police outside a Baghdad mosque and transferred to US custody.
The video showed five masked gunmen decapitate Armstrong before placing his severed head on his back in the latest grim killing by Zarqawi's movement, which has claimed multiple car bombings and assassinations in the last four months.
The executioner threatened to kill another hostage -- either British engineer Kenneth Bigley or fellow American Jack Hensley -- in 24 hours if London and Washington persisted in ignoring the demands for the release of Iraqi women prisoners in the custody of US-led forces.
The executioner denounced "the American occupier... who is carrying out butchery in Iraq, without discriminating between the infant and the old man, between men and women."
"Because you Americans have not freed our sisters... and because your agent (Iraqi Prime Minister Iyad) Allawi claims that in your prisons you have only two women from the former regime... we are cutting off this head."
When he finished the speech he pulled out a knife and slit the American's throat before sawing off his head, ignoring the victim's screams.
The victim was dressed in orange overalls like those worn in American prisons and associated with images of Muslims detained at the US prison in Guantanamo Bay in Cuba.
Armstrong, who counts among at least 27 foreign hostages murdered here since April, was the second American beheaded in Iraq after 26-year-old Jewish businessman Nicholas Berg was decapitated in May by Zaraqawi's faction, heralding the new wave of sadistic killings plaguing the country.
The video fit the pattern of hostage taking and murder, where abduction is now used as a political tool to intimidate those participating in US efforts to rebuild Iraq.
The rise in Islamic extremist-inspired violence dovetailed with mounting international criticism of US President George W. Bush's decision to invade Iraq a year-and-half ago.
Bush's contender in November presidential elections, John Kerry, hammered the US commander-in-chief in a speech Monday for presiding over Iraq's descent into failure and chaos.
Allawi was due to arrive in America Tuesday after vowing that January national elections would go forward despite the soaring violence.
He made his comments in London where he met with British Prime Minister Tony Blair, America's main ally in the drive to war.
The British government quickly condemned the murder of Armstrong.
"This appalling crime strengthens our resolve to work with the Iraqi government and people to bring security, stability and democracy to Iraq," said the British Foreign Office.
Bloodshed -- which has already claimed more than 400 lives this month -- showed no signs of abating as at least three people were killed in another US air raid on the militant stronghold of Fallujah on Monday, witnesses said.
US warplanes launched a double attack on the northern entrance to the city, which has offered the toughest resistance to the US-led coalition since last year's invasion and has become a no-go zone for ground troops.
An American soldier was killed near the northern oil centre of Kirkuk, the military said, raising the US death toll past 1,032.
The execution of the American contractor and the uncertain fate of his two companions was just one of several hostage crises in Iraq.
But one kidnapping ended without bloodshed on Monday. Eighteen Iraqi national guardsmen, who had been threatened with death in retaliation for the arrest of a key lieutenant of radical leader Moqtada Sadr, were freed by their captors, a Sadr aide said.
A Turkish company confirmed that 10 of its employees had been taken hostage, but declined to say whether it would end its Iraq operations to save their lives.
A Turkish truck driver was killed and another wounded in the main northern city of Mosul, while in a separate ambush another four Turks -- two journalists and two aid workers -- were injured, police and Turkish diplomats said.
Three Lebanese and their Iraqi driver were also reported missing, among the more than 100 abductions of foreigners since April last year when Shiite and Sunni revolts swept the country.
The spectre of inter-faith strife loomed large as the leading Sunni clerics' organization announced the assassinations of two of its members in Baghdad.
Sunni leaders did not immediately apportion blame for the killings but the deaths threatened to fan tensions between the ousted Sunni Arab elite and Iraq's Shiite majority.