In the video, a black-clad militant stands before a severed head that he claims is that of Mr Kassig, who is also known as Abdul-Rahman, a name he took following his conversion to Islam while in captivity.

Speaking in English in a British accent, the man says: “This is Peter Edward Kassig, a US citizen, of your country; Peter who fought against the Muslims in Iraq, while serving as a soldier.”

At another point the man says: “We say to you Obama, you claim to have withdrawn from Iraq four years ago. We said to you then that you were liars, that you had not withdrawn and that if you had withdrawn, that you would return.”

The fighter appears to be the man known as Jihadi John – who was responsible for previous hostage killings and was  reportedly injured in a US airstrike.

The White House says the US intelligence community is working to verify the video.

National Security Council spokeswoman Bernadette Meehan said that if the video is authentic, the White House would be “appalled by the brutal murder of an innocent American”, and expressed deep condolences for Mr Kassig’s family and friends.

Prime Minister David Cameron said: “These beheadings show once again what a depraved organisation this is.

“Like others who have been murdered in cold blood by ISIL, Abdul-Rahman Kassig was a selfless humanitarian worker who had gone to the region to help care for those fleeing the Syrian conflict.

“This underlines the deplorable depths to which these terrorists are prepared to go – savagely murdering a compassionate man.

“My heart goes out tonight to Abdul-Rahman’s family.”

The Foreign Office said it is aware of the video, which it is analysing. A spokesperson said: “If true, this is a further disgusting murder.”

Previous videos have shown a desert landscape, but in the latest footage the IS militant appears to be in front of a town with fields in the distance.

The footage identifies the militant’s location as Dabiq, a small town in Syria’s Aleppo province, near the border with Turkey.

The video also shows what appears to be the mass beheading of a number of captured Syrian soldiers.

Mr Kassig, a former soldier, was threatened at the end of a video showing the beheading of British aid worker Alan Henning in October.

The 26-year-old from Indiana was taken hostage in October 2013.

If confirmed, Mr Kassig’s beheading would be the fifth such killing of a Westerner by Islamic State, following the deaths of US journalists Steven Sotloff and James Foley and British aid workers David Haines and Mr Henning.