18.37 David Cameron has said: “I’ve just seen the news. It’s an absolutely disgusting and despicable act and I will be making a statement later.”
18.31 A masked figure in the video also issued a threat against a British hostage.
18.26 The White House said that it had yet to authenticate the footage, which SITE said showed 31-year-old freelance writer Steven Sotloff on his knees beside an IS fighter with a knife.
18.25 The video warns governments to back off “this evil alliance of America against the Islamic State”.
Sotloff, 31, disappeared while reporting in Syria in August 2013. His apparent kidnap was not widely reported until he appeared on a video released last month by the Isil.
In the footage a masked militant beheads US reporter James Foley then parades Mr Sotloff, warning he will meet the same fate unless US President Barack Obama ends air strikes against the group in Iraq.