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 two British or American colleagues if female prisoners were not released across Iraq.
The family of the British hostage made a poignant plea for British Prime Minister Tony Blair to meet the militants` demands to free the surviving captives, piling the pressure on the coalition to compromise.
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 neighbourhood.
A US official in Washington said 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."
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 Zarqawi`s faction.
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 family of 62-year-old British civil engineer Bigley appealed to the British premier to intervene to save his life.
Bigley`s son Craig Bigley told BBC television: "I ask Tony Blair personally to consider the amount of bloodshed already suffered.
"Please meet the demands and release my father -- two women for two men... Only you can save him now. You have children and you will understand how I feel at this time."
US military and state department officials in Baghdad called Armstrong`s killing "disturbing" and "barbaric" but refused to comment on the prospects of retaliation against suspected militants or any rescue efforts underway to save other hostages.
The rise in Islamic extremist violence dovetailed with mounting 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.
But Bush`s national security adviser Condoleezza Rice -- speaking just before the president was due to address the UN General Assembly -- said Iraq was not "falling into civil war" although the country faces a "very difficult situation."
Iraqi Prime Minister Iyad Allawi was meanwhile due to arrive in the United States after vowing during a trip to London that January national elections would go forward despite the soaring violence.
Two senior aides to Moqtada Sadr were arrested in a predawn raid by US troops on the radical Shiite cleric`s office in the central city of Najaf.
"A group of US marines raided the office of Sayed Sadr at 2:00 am (2200 GMT Monday) and arrested Sheikh Ahmed al-Shaibani and Hosam al-Husseini and a number of other workers in the office," said Abu Sadeq al-Adhari, an official in Sadr`s office.
The US military in Baghdad was unable to confirm the raid and the arrests, which come two days after the arrest of a senior Sadr official in Baghdad.
Bloodshed -- which has already claimed more than 400 lives this month -- showed no signs of abating as one Iraqi civilian was killed and eight injured, including two Iraqi national guardsmen were killed in two separate attacks in the restive town of Baqubah, northeast of Baghdad.
A roadside bomb exploded in the path of an Iraqi police patrol, killing a civilian and injuring five others according to witnesses, while a spokesman for the national guard in Baquba said two of its members and a civilian were injured in another roadside bombing late Monday.
Four US soldiers were injured, one seriously, in a suicide car bomb attack on their patrol on the road to Baghdad airport, the US military said.
Seven to nine civilians were taken to hospital, an interior ministry spokesman said.
The execution of the American contractor and the uncertain fate of his two companions was just one of several hostage crises.
The Ankara-based Vinsan company, which confirmed that 10 of its employees had been taken hostage, said it would suspend all activities in Iraq in a bid to save their employees.
More than 100 foreigners have been abducted in Iraq since April last year when Shiite and Sunni revolts swept the country.