An American hostage held in Iraq was beheaded by his captors, raising fears for the safety of a British engineer held hostage in the violence-ravaged country.

A video posted Monday on an Islamic website showed the beheading of the man who was identified as American construction contractor Eugene Armstrong. The video showed a masked man sawing his head off with a knife.

It also showed the banner of suspected al-Qaida operative Abu Mussab al-Zarqawi's Tawhid and Jihad group, which said it had kidnapped Armstrong along with another American hostage Jack Hensley and British engineer Kenneth Bigley, in central Baghdad last Thursday.

Tawhid and Jihad said in footage posted on the Internet on Saturday that it would kill the three hostages unless Iraqi women were freed from the Abu Ghraib and Umm Qasr jails in 48 hours. The group threatens to kill the remaining hostages unless their demand is met.

Hearing the news of Armstrong's death, the British government issued a statement condemning the killing as an "appalling crime,"but gave no new information concerning the possible fate of Bigley.

"The British government utterly condemns the kidnapping and murder of all innocent civilians...This appalling crime strengthens our resolve to work with the Iraqi government and people to bring security, civility and democracy to Iraq," the Foreign Office said in a statement.

British Prime Minister Tony Blair on Monday reiterated his country's firm stance in Iraq and vowed that Britain would not back down to the hostage takers.

"Of course these situations are terrible ...But our response has not got to be to weaken. Our response has got to be to stand firm, to say, whatever the differences over the Iraq conflict, there is a clear right and wrong on these issues, and that is to be with the democrats and against the terrorists," Blair told a joint news conference with visiting Indian Prime Minister Manmohan Singh.

Also on Monday, Iraqi interim Prime Minister Iyad Allawi met Blair in London, vowing he would not let the spiraling bloodshed upset plans for the January elections.

Meanwhile, US warplanes launched a double attack Monday on the restive city of Fallujah, killing at least two people and wounding three others.

The casualties were municipal workers who were working on a construction project near the railway station in the northern part of the city, a source from the Fallujah General Hospital said.

US warplanes frequently attack construction sites on the edge of the city, some 50 km west of Baghdad, citing intelligence which showed they were used as positions by militants with alleged links to Jordanian-born militant al-Zarqawi.

The raids have intensified this month. Air strikes near Fallujah killed some 44 people on Thursday.

Source: Xinhua