Aljazeera aired a videotape of captive Kim Son Il filmed by a group calling itself Jamaat al-Tawhid and Jihad.
Kim is described as a worker with a trade company in Baghdad.
The captors called on the Seoul government not to send additional troops to Iraq.
Kim was first shown on his own, distraught and in tears, asking the South Korean government to rethink its troop deployment plans.
On Friday, Seoul announced it would begin deploying 3000 troops to northern Iraq in early August to complement an already existing forces of more than 600, mostly comprised of engineers and medics.
"Please get out of here, here, here. I do not want to die; I do not want to die. I want to live. My life is important," he shouts.
The captors threatened to behead the captive if the South Korean government would not reconsider its deployment decision within 24 hours beginning Sunday evening.
"Our message is to you, the government of [South] Korea and the Korean people: we call you on to withdraw your forces from our land and not send new additional troops to this land [Iraq].
"Otherwise, we will send you the head of this Korean (pointing at the hostage) and heads of your other soldiers will follow," one of the captors said.
Hours after the video first aired, the South Korea Foreign Ministry announced it had set up a special task force and that President Roh Moo-hyun's National Security Council will hold an emergency meeting on Monday to discuss Kim's seizure in Iraq.
"A task force was formed and they are holding a meeting this
morning, presided by [the] vice foreign minister," a foreign ministry spokesman told Reuters, adding that the meeting was scheduled for 8:00am (2300 GMT Sunday).