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A masked Islamic State militant holding a knife speaks next to man purported to be U.S. journalist James Foley at an unknown location in this still image from an undated video posted on a social media website.REUTERS TV/Reuters

Vowing "relentless" attacks against Islamic State terrorists, U.S. President Barack Obama said the extremist jihadis seeking to carve a caliphate out of Iraq and Syria have no place in the 21st century.

In response to the deliberate killing of a U.S. citizen, James Foley, who was beheaded by a masked black-clad Islamic State executioner, Mr. Obama condemned the militant group as uncivilized cowards.

(Who are the Islamic State? Get caught up with The Globe's primer)

"They have rampaged across cities and villages killing innocent, unarmed civilians in cowardly acts of violence," Mr. Obama said. "They abduct women and children and subject them to torture and rape and slavery. They have murdered Muslims, both Sunni and Shiite, by the thousands. They target Christians and religious minorities, driving them from their homes, murdering them when they can."

As U.S. warplanes again pounded Islamic State militant positions Wednesday, the President made it clear he wouldn't bow to the their threat to kill another American unless he called off the air strikes.

But Mr. Obama, who made a brief but toughly worded statement while on a golf-and-beach vacation on Martha's Vineyard, didn't indicate whether he intended to ramp up attacks on the extremists who now control a swath of Syria and Iraq roughly the size of Vancouver Island. Striking at Islamic State targets in Syria would amount to a massive escalation of Mr. Obama's so-far limited campaign of air strikes backing Kurdish and Iraqi forces.

On Tuesday, after retreating from Mosul Dam following scores of U.S. air strikes which backed an assault by Kurdish peshmerga troops, Islamic State posted a video of the beheading of Mr. Foley, an American journalist, who had been seized nearly two years ago in Syria.

It said it was killing Mr. Foley in retaliation for the air strikes ordered by Mr. Obama, the first U.S. bombing in Iraq since the last American troops left in 2011.

A video of the beheading ignited revulsion and outrage around the world.

The President called for an international coalition to stamp out Islamic State but indicated he wanted the U.S. military to play only a supporting role.

"From governments and peoples across the Middle East, there has to be a common effort to extract this cancer so that it does not spread," he said, adding: "When people harm Americans, anywhere, we do what's necessary to see that justice is done. And we'll act against ISIL, standing alongside others," referring to the group by its former name, Islamic State of Iraq and the Levant.

But Mr. Obama never used the word "war" except to disparage Islamic State's position. "They may claim out of expediency that they are at war with the United States or the West, but the fact is they terrorize their neighbours and offer them nothing but an endless slavery to their empty vision and the collapse of any definition of civilized behaviour," he said.

Mr. Obama, while approving air strikes, has insisted that no U.S. ground combat forces would be sent to Iraq despite the collapse of Iraqi forces who fled in disarray as the militants swept down both the Tigris and Euphrates valleys in recent months to control much of northern and western Iraq.

However, the Associated Press quoted senior, but unnamed, Pentagon officials as saying Wednesday that hundreds more U.S. special forces could soon be sent to Iraq.

Mr. Obama made no mention of Islamic State's threat to kill Steven Sotloff, another American journalist, unless air strikes cease.

Moments before Mr. Foley was killed, he deplored the U.S. air strikes.

Shown shaven-headed and kneeling in a barren desert location wearing an orange tunic with a knife-wielding executioner standing beside him, Mr. Foley, 40 says: "I guess, all in all, I wish I wasn't American."

Mr. Foley delivered what seemed to be a prepared statement with a chilling message. "I call on my friends, family and loved ones to rise up against my real killers, the U.S. government, for what will happen to me is only a result of their complacency and criminality."

At the end of the video, after an image of a severed head lying on a body, the executioner warned that Mr. Stoloff could be next.

"The life of this American citizen, Obama, depends on your next decision," he says, speaking English with a British accent.

British Prime Minister David Cameron cut short his vacation and returned to London. "We have not identified the individual responsible, but from what we have seen it looks increasingly likely that it is a British citizen," he said.

An unknown number of jihadis holding passports from Western nations have joined Islamic State and other militant groups fighting to topple Syrian dictator Bashar al-Assad in the last three years as the civil war in Syria has escalated.

Mr. Cameron said the struggle against extremist Islam is "a battle we have to fight … whether it is dealing with this problem in Somalia, in Mali, in Afghanistan, in Iraq, in Syria. … What happens in these other far-flung places can come back and cause huge harm."

Prime Minister Stephen Harper on Wednesday condemned Mr. Foley's killing. "Unfortunately this is just the tip of an iceberg of an enormous campaign of really shocking and degrading and disgusting terror that is taking place across that entire region – Iraq, Syria," he said. "It is threatening more and more countries, and frankly, this terrorist caliphate in our judgment represents an increasing long-term threat."

At the United Nations, Secretary-General Ban Ki-moon also spoke out against "the horrific murder of journalist James Foley," calling it "an abominable crime that underscores the campaign of terror the Islamic State of Iraq and the Levant continues to wage against the people of Iraq and Syria," according to his spokesman Stephane Dujarric.

With a report from Ian Bailey