The footage — depicting what the U.S. said appeared to be a sickening act of brutality — was posted two weeks after the release of video showing the killing of James Foley and days after Sotloff's mother pleaded for his life.
Barak Barfi, a spokesman for the Sotloff family, said that the family had seen the video but that authorities have not established its authenticity.
"The family knows of this horrific tragedy and is grieving privately. There will be no public comment from the family during this difficult time," Barfi said.
Sotloff, 31, who freelanced for Time and Foreign Policy magazines, vanished in Syria in August 2013 and was not seen again until he appeared in a video released online last month that showed Foley's beheading. Dressed in an orange jumpsuit against an arid Syrian landscape, Sotloff was threatened in that video with death unless the U.S. stopped airstrikes on the group in Iraq.
In the video distributed Tuesday and titled "A Second Message to America," Sotloff appears in a similar jumpsuit before he is apparently beheaded by a fighter with the Islamic State, the extremist group that has claimed wide swaths of territory across Syria and Iraq and declared itself a caliphate.
In the video, the organization threatens to kill another hostage, this one identified as a British citizen.
The SITE Intelligence Group, a U.S. terrorism watchdog, first reported about the video's existence. Unlike the footage of Foley's beheading, which was widely shared on Twitter accounts affiliated with the Islamic State group, the video purporting to show Sotloff's killing was not immediately posted online, though several jihadi websites told users to expect it Tuesday.
In Washington, State Department spokeswoman Jen Psaki said U.S. intelligence analysts will work as quickly as possible to determine if the video of the beheading is authentic.
"If the video is genuine, we are sickened by this brutal act, taking the life of another innocent American citizen," Psaki said. "Our hearts go out to the Sotloff family and we will provide more information as it becomes available."
Psaki said it's believed that "a few" Americans are still being held by the Islamic State but would not give any specifics.
The fighter who beheads Sotloff in the video called it retribution for Obama's continued airstrikes against the group in Iraq.
"I'm back, Obama, and I'm back because of your arrogant foreign policy towards the Islamic State ... despite our serious warnings," the fighter said. "So just as your missiles continue to strike our people, our knife will continue to strike the necks of your people."
At the end of the video, he threatens to kill a third captive, a Briton, David Cawthorne Haines. It was not immediately clear who Haines was. Officials with the British Foreign Office declined to immediately comment.
The killer specifically mentions the recent U.S. airstrikes around the Mosul dam and the beleaguered Iraqi town of Amirli, making it unlikely that Sotloff was killed at the same time as Foley, as some analysts had speculated.
Over the weekend, Iraqi government forces with help from U.S. airstrikes broke Islamic State's two-month siege of Amirli, a town where some 15,000 Shiite Turkmens had been stranded.
Before the video's release, messages on websites frequented by jihadis warned of a "second message to America." However, it appeared that a separate faction of the Islamic State group posted it early to another account before it was supposed to be released. A later Twitter message apologized for releasing it early and asked fellow jihadis not to "reproach" them.
Sotloff's mother had pleaded for his release last week in a video directed at the Islamic State group.
Addressing the leader of the Islamic State group by name, Shirley Sotloff said in a video her son was "an innocent journalist" who shouldn't pay for U.S. government actions in the Middle East over which he has no control.
White House press secretary Josh Earnest said after the release of the latest footage: "This is something that the administration has obviously been watching very carefully. Our thoughts and prayers first and foremost are with Mr. Sotloff and Mr. Sotloff's family and those who worked with him."
The Islamic State group has terrorized rivals and civilians alike with widely publicized brutality as it seeks to expand a proto-state it has carved out on both sides of the border.
In its rise to prominence over the past year, the extremist group has frequently published graphic photos and gruesome videos of bombings, beheadings and mass killings.
Sotloff graduated from Kimball Union Academy in New Hampshire in 2002 and then began attending the University of Central Florida, according to a society notice in The Miami Herald's archives.
UCF spokeswoman Zenaida Gonzalez Kotala said school records show Sotloff was a student majoring in journalism from fall 2002 until fall 2004. She said the school has no record of him graduating.
Just how Sotloff made his way from Florida to Middle East hotspots is not clear. He published articles from Syria, Egypt and Libya in a variety of publications. Several focus on the plight of ordinary people in war-torn places.
In a statement, Foreign Policy magazine said it was saddened by news of his death and called him a "brave and talented journalist" whose reporting "showed a deep concern for the civilians caught in the middle of a brutal war."
House Foreign Affairs Chairman Rep. Ed Royce, R-Calif., said the new video demonstrates the Islamic State's "barbarity across the region — beheading and crucifying those who don't share their ideology." He said the U.S. and allies need to step up military action against the Islamic State — including through airstrikes.
Associated Press writers Josh Lederman and Lara Jakes in Washington, Nariman El-Mofty in Cairo and Sylvia Hui in London contributed to this report.
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