ISLAMIC State fighters have released a video which they claim shows the beheading of US journalist Steven Sotloff, followed by a threat that a British hostage could be next.
Sotloff, 31, who freelanced for Time and Foreign Policy magazines, had last been seen in Aleppo, Syria in August 2013 where he was working as a reporter.
Last month, he appeared at the end of a video released online by the extremist group, formerly known as Isis, that showed the beheading of fellow American journalist James Foley, who had been held captive in Syria since 2012.
In the footage last month, Sotloff was pictured dressed in an orange jumpsuit against the backdrop of an arid landscape. IS fighters then threatened to kill Sotloff unless the US stopped air strikes against the group in Iraq.
The 3-minute video distributed today begins with a short excerpt from a speech by US President Barack Obama on the fight against terror, followed by text that reads: "A second message to America".
The IS fighter, who suggests he is the same man who killed Mr Foley, says: "I'm back, Obama, and I'm back because of your arrogant foreign policy towards the Islamic State...despite our serious warnings."
He then appears to be behead Mr Sotloff.
The footage ends with the threat of presenting a British hostage, and a warning to "back-off and leave our people alone."
A spokesman for Mr Sotloff's family, Barak Barfi, has confirmed that the journalist's relatives know of "this horrific tragedy" and said they are "grieving privately."
He added that the family has not been told whether the video is authentic, and do not plan on making any additional comments for the time being.
Prime Minister David Cameron has condemned the purported video as "disgusting and despicable", and said he would be making a statement on the situation shortly.
A US terrorism watchdog, the SITE Intelligence Group, first reported the video's existence.
White House spokesman Josh Earnest said the Obama administration cannot immediately confirm that the footage had been released, but if there is such a video it would be carefully analysed.
"This is something that the administration has obviously been watching very carefully," Mr Earnest said.
"Our thoughts and prayers first and foremost are with Mr Sotloff and Mr Sotloff's family and those who worked with him."
In a separate briefing, US State Department spokeswoman, Jen Psaki, said US intelligence services would "work as quickly as possible to determine its [the video's] authenticity."
"If the video is genuine we are sickened by this brutal act taking the life of another innocent American citizen. Our hearts go out to the Sotloff family," she told reporters.
Following Mr Foley's death, Mr Sotloff's mother had appealed to IS leader Abu Bakr al-Baghdadi to spare her son's life.
In a video in which she directly addressed the IS leader, she urged that her son was "an innocent journalist" who had no control over US policy in the Middle East.
As it has risen in prominence over the past year, IS has taken over a third of Syria and Iraq.