A television picture shows Craig Bigley (left), the son of British hostage Kenneth Bigley (picture on right), apppealing to Tony Blair to save his father?s life. (Reuters)

Baghdad, Sept. 21 (Reuters): Militants who beheaded an American hostage in Iraq said they would kill another US captive and a Briton today if their demands were not met.

The militants led by Washington?s top foe in Iraq released a video yesterday showing US contractor Eugene Armstrong sitting blindfolded on the floor in an orange jumpsuit, black-clad and hooded gunmen standing behind him.

Armstrong rocks back and forth as a militant reads a statement. Then one of the men grabs him and saws off his head with a knife.

Armstrong was seized in Baghdad on Thursday along with fellow American Jack Hensley and Briton Kenneth Bigley.

US President George W. Bush, in comments made before the video?s release, said Washington would not negotiate. ?They will behead people in order to shake our will. These people are ideologues of hatred,? Bush told a campaign rally. ?We will stay on the offensive against them.?

The Tawhid and Jihad group led by al Qaida ally Abu Musab al-Zarqawi said in the footage of Armstrong?s killing it would behead the other two hostages within 24 hours unless female inmates were released from the Abu Ghraib and Umm Qasr jails.

The US military says it does not hold any female prisoners in either of those two jails, and that only two women are in US detention in Iraq. The two, dubbed: ?Mrs Anthrax? and ?Dr Germ? by US forces, are accused of working on Saddam Hussein?s weapons programmes and are held at a secret high-security camp.

Washington says Zarqawi, a Jordanian, is its number one enemy in Iraq. His group has claimed responsibility for most of the bloodiest suicide attacks in Iraq since Saddam?s overthrow.

Zarqawi?s group also beheaded US telecoms engineer Nicholas Berg in May and South Korean driver Kim Sun-il in June.

The US has offered $25 million for information leading to the death or capture of Zarqawi, and has launched a series of air strikes on the rebel-held city of Falluja.

Hensley?s wife Patty, in an interview with CNN, pleaded for his release for the sake of their 13-year-old daughter. ?I would plead with them to please realise this man does not deserve this fate,? she said. ?I want them to understand that he has no political value whatsoever. He was just there doing a service for the Iraqi people.?

A US official said Armstrong?s body had been identified. In the video showing his killing, one of the militants read a statement ridiculing Bush and promising Iraqi women their honour would be protected. ?Oh, you Christian dog Bush, stop your arrogance ... The mujahideen will give America a taste of the degradation you have inflicted on the Iraqi people,? the statement said.

Models of stability

Bush declared Iraq and Afghanistan to be on the road to democracy and stability today and said they would become models for reshaping the entire West Asia.

In an address to the annual session of the UN General Assembly six weeks before the US presidential election, Bush vigorously defended his decisions to invade Afghanistan and Iraq and urged the world to do more to support their reconstruction.