A Japanese man who was taken hostage by militants in Iraq has been killed, the Kyodo news agency reported on Saturday, citing government officials.

Al Qaeda ally Abu Musab al-Zarqawi's militant group said in an Internet video on Wednesday it would behead 24-year-old Shosei Koda within 48 hours if Japan did not withdraw its troops from Iraq.

Japanese Prime Minister Junichiro Koizumi rejected the demand, saying he would not bow to terrorists.