Islamic State militants claims beheading of US hostage Peter Kassig

© AFP Photo / Kassig Family handout

Islamic State militants have beheaded US aid worker Peter Kassig even though he converted to Islam, a video posted on social media shows.

Kassig, 26, was captured on October 1, 2013, by Islamic State (IS, formerly ISIS/ISIL) militants on his way to the city of Deir Ezzour in eastern Syria.

After conversion during captivity, Kassig took the name Abdul-Rahman.

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The footage reportedly shows Jihadi John murdering Kassig. This comes despite earlier reports that the extremist, who has executed other UK and US hostages, was wounded in an airstrike on a top-level extremists' meeting in Iraq last week.

The video showing Kassig's death is part of 15 minutes of footage, which depicts IS militants beheading several other men. The victims have been identified as officers serving under the regime of Syrian President Bashar Assad.

In the video the extremists deliver warnings to the US, UK and other countries.

Islamic State militants first showed him in the video of the beheading of UK aid worker Alan Henning, who shared a prison cell with Kassig. After Jihadi John, an IS executioner with a London accent, killed Henning, he also threatened Kassig would be next.

US authorities are "working as quickly as possible to determine its [the video] authenticity," spokeswoman Bernadette Meehan from the US National Security Council said in a statement.

"If confirmed, we are appalled by the brutal murder of an innocent American aid worker and we express our deepest condolences to his family and friends," she added.

The UK Foreign Office also said it is examining the video's authenticity.

"We are aware of a further video and are analyzing its contents. If true, this is a further disgusting murder," the spokeswoman told Reuters.

UK PM David Cameron said he is "horrified" by the murder of Kassig.

"I'm horrified by the cold blooded murder of Abdul-Rahman Kassig. ISIL have again shown their depravity. My thoughts are with his family," he said.

Kassig had served in Iraq in 2007 before becoming a medical technician. In May 2012, he traveled to Beirut, Lebanon where he volunteered in hospitals. He then helped in Palestinian refugee camps, "offering his services as a trauma medic to Syrian refugees wounded in the fighting in Syria."

He founded his own aid organization, SERA (Special Emergency Response and Assistance), a non-governmental group intended to provide relief to Syrian refugees.

His parents, Ed and Paula Kassig from Indiana, had been appealing for their son's release. They tried to reach the IS leader by writing messages on Twitter.

"We have tried to contact you directly to plea for the life of our only son, Abdul Rahman Kassig, and have not received any response. Please tell us what more we can do so that Abdul Rahman may continue to serve and live his life in accordance with the teachings of Islam," she wrote on Twitter.

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The Kassig family released a letter from their son written on October 13, which was delivered to them by a hostage, who had been released. In the letter Kassig thanks his parents "for everything they have both done" for him. He describes his captivity, saying that he and the other hostages "share dreams and stories of home and loved ones."

"I am obviously pretty scared to die but the hardest part is not knowing, wondering, hoping, and wondering if I should even hope at all," he wrote. "If I do die, I figure that at least you and I can seek refuge and comfort in knowing that I went out as a result of trying to alleviate suffering and helping those in need."