In a videotape received by Aljazeera, the resistance group Jamat al-Tawhid and Jihad said it was fulfilling a pledge it made yesterday that the 33-old-year South Korean translator Kim Sun-Il would be beheaded if their demands were not met by South Korean government.
The captors threatened on Sunday to kill Kim, who was captured last Thursday near Falluja, in 24 hours if South Korea did not cancel its plan to deploy troops to Iraq.
South Korea rejected the demand and said on Monday it would send forces to Iraq despite an earlier video showing Kim begging for his life.
South Korean President Roh Moo-hyun expressed sorrow on Wednesday over the killing of a South Korean hostage in Iraq but said his country would still send more troops there.
In unusually brief televised remarks, Roh told the country South Korea would deal resolutely with "terrorism".
"We strongly condemn terrorism and we will sternly combat it in cooperation with the international community," Roh said in a televised statement after South Korean officials confirmed Kim Sun-Il's beheading.
Kim is an employee of South Korean Gana Trading Company that supplies equipment to the US military and has been in Iraq since June 2003.
On Tuesday, protests were staged across South Korea pressing the Seoul to scrap its plan to deploy more troops and condemning the government's "irresponsible response".
In an online poll Tuesday 70.5% of 28,281 respondents demanded Seoul cancel the troop deployment to Iraq, with only 24.2% supporting it.