Iraq's government said one of two women in U.S. custody would be freed on Wednesday, but insisted the move was unrelated to the demands of kidnappers who have killed two Americans and are threatening to kill a Briton.

The Tawhid and Jihad group led by Jordanian al Qaeda ally Abu Musab al-Zarqawi said in an Internet statement it had killed American Jack Hensley because its demands for the release of female prisoners from jails in Iraq had not been met.

U.S. and Iraqi officials said a body, yet to be identified, had been found.

"Lions of the Tawhid and Jihad have slaughtered the second American hostage after the deadline," the statement said, adding that footage of the killing would be posted on the Internet.

"The British hostage will meet the same fate if the British government does not do what must be done to release him."

U.S. forces say they only hold two female Iraqi prisoners. Rihab Taha and Huda Ammash, dubbed "Dr. Germ" and "Mrs. Anthrax" by U.S. forces, are held in a prison for high-level suspects.

There was no confirmation from the kidnappers that their release was specifically what they were seeking.