A website claiming to be linked to the group holding Ken Bigley and two Americans said one of the Americans had been killed.
The website carried a nine-minute video purporting to show the man being beheaded.
The US recovered the body of the man shown on the tape, naming him as Eugene Armstrong, unconfirmed reports have said.
"His body has been recovered and it's been identified," a US official told Reuters news agency on condition of anonymity.
A militant group loyal to a suspected al-Qaeda leader, Abu Musab al-Zarqawi, said it had beheaded the hostage.

The website carried a nine-minute video purporting to show the man being beheaded.
The US recovered the body of the man shown on the tape, naming him as Eugene Armstrong, unconfirmed reports have said.
"His body has been recovered and it's been identified," a US official told Reuters news agency on condition of anonymity.
A militant group loyal to a suspected al-Qaeda leader, Abu Musab al-Zarqawi, said it had beheaded the hostage.


