Herve Gourdel beheading video released by another ISIS-linked terrorist group - Jund al-Khilafah

Pro-ISIS demonstrators outside the provincial government headquarters in Mosul, Iraq in June(AP)

French mountaineering guide Herve Gourdel was reportedly beheaded by an Algerian extremist group that calls itself Jund al-Khilafah. The news came after a video was released showing what is allegedly the hostage's decapitation. The video was distributed on Wednesday by U.S. terrorism watchdog, SITE Intelligence Group.

The militants, who pledged allegiance to the Islamic State group last Sept. 14, abducted 55-year old Gourdel on Sunday in the north-east Kabylie region in Algeria, with a threat to the French government that he would be killed within 24 hours unless France backs off from the fight in Iraq.

An earlier video showed Mr. Gourdel sitting in what looks like a camp, with two armed and masked men on either side of him. He said, "This armed group is asking me to ask you [French President Francois Hollande] to not intervene in Iraq."

France is the first country to join the fight against the Islamic State fighters, and it had started its airstrikes last week.

Both President Francois Hollande and Prime Minister Manuel Valls refused to give in to the demands. President Hollande said, "As grave as this situation is, we will not give into any blackmail, any pressure, any ultimatum no matter how odious, how despicable."

According to reports, Jund al-Khilafah (Soldiers of the Caliphate) was responding to a call made by IS "to attack citizens involved in strikes on Iraq."

The video entitled "Message of blood for the French government" has been described as resembling the earlier alleged decapitations of two American journalists, James Foley and Steven Sotloff, and British aid worker David Haines.

"Our values are at stake," Prime Minister Valls has been quoted as saying after he learned about the said video. He did not make further comments.