The UK will not be "cowed" by the threats of Islamic State militants who have killed two American journalists and are threatening the life of a British hostage, Prime Minister David Cameron has told the House of Commons.
Mr Cameron was speaking at Prime Minister's Questions shortly after chairing a meeting of the Government's emergency Cobra committee in Whitehall, hastily convened after the release last night of a video showing the beheading of Steven Sotloff.
Following the meeting in Whitehall, Foreign Secretary Philip Hammond said the Government will examine "every possible option" to protect a British hostage who was threatened with death by a militant in the video.
Mr Cameron confirmed that analysis of the film suggested that the militant responsible for Mr Sotloff's death was the same UK citizen - nicknamed "jihadi John" - featured in a video of the earlier murder of another US journalist, James Foley, by the group also known as Isil (Islamic State in Iraq and Lebanon).
Denouncing Mr Sotloff's murder as "sickening and brutal", the Prime Minister voiced "shock and anger that it again appears to have been carried out by a British citizen".
And he told MPs: "Let me be very clear. This country will never give in to terrorism. Our opposition to Isil will continue at home and abroad."
Mr Cameron told MPs: "I am sure that the whole House and the whole country will join with me in condemning the sickening and brutal murder of another American hostage and share our shock and anger that it again appears to have been carried out by a British citizen.
"All our thoughts are with the British hostage and his family. Their ordeal is unimaginable."
He added: "It is important that we are clear about the nature of the threat we are facing. It makes no distinction between cultures, countries and religions. There is no way to appease it.
"The only way to defeat it is to stand firm and to send a very straightforward message - a country like ours will not be cowed by these barbaric killers.
"If they think that we will weaken in the face of their threats, they are wrong. It will have the opposite effect. We will be more forthright in the defence of the values - liberty under the rule of law, freedom, democracy - that we hold dear, and I'm sure a united message to that effect will go forward from this House today."
Labour leader Ed Miliband questioned the Prime Minister in detail about the package of measures announced on Monday to combat the threat from British jihadists returning to this country.
Despite the Liberal Democrats insisting they had not "definitively" signed up to plans to bolster terrorism investigation and prevention measures (Tpims) by allowing suspects to be relocated, Mr Cameron said he was certain the proposals would be carried through.
"I can confirm it will go ahead. It is going to require legislation," he said. The Premier said ministers were listening to the Government's independent reviewer of terrorism legislation, David Anderson.
"What he's talked about is some combination of exclusion and relocation and it is that that needs to be introduced into Tpims. I think we should try to do this on a cross-party basis to send the clearest possible message, and I think that urgency is the order of the day."
Mr Cameron also dismissed concerns - including from former attorney general Dominic Grieve - that plans to exclude British jihadis from re-entering the country could be illegal.
He said: "I do believe it is legally permissible, but it is going to take some work for this reason. We already have the power when people are trying to return to the UK. If it is a foreign national, we can exclude them - even if they have lived in this country for any number of years.
"If it's a dual national, you can strip them of their British citizenship and exclude them from the country. If it is a naturalised citizen, you can, under our new laws passed recently through this House, you can strip them of their British nationality.
"But I do believe there is a gap where you have someone born and raised and a British citizen - rather like the individual we discussed on Monday from High Wycombe, saying he wanted to return and do harm to our country.
"Of course, the best thing to do is gather evidence, prosecute, convict and imprison - but I do think there may be occasions where we need to exclude, so therefore we should fill that gap in our armoury. I believe it is legal and possible to do it."
Earlier President Barack Obama denounced Mr Sotloff's murder as "a horrific act of violence" and insisted that the US would not be "intimidated" by militants' threats.
Speaking during a visit to Estonia before he travels to Wales for the Nato summit, Mr Obama said: "Whatever these murderers think they will achieve by killing innocent Americans like Steven, they have already failed.
"They have failed because, like people round the world, Americans are repulsed by their barbarism. We will not be intimidated. Their horrific acts only unite us as a country and stiffen our resolve to take the fight against these terrorists.
"Those who make the mistake of harming Americans will learn that we will not forget, that our reach is long and that justice will be served."
The masked killer featured in the latest IS video is thought to be the same jihadist with a London accent who carried out the on-screen slaughter of US reporter James Foley a fortnight ago.
In the chilling footage, Mr Sotloff - a freelancer for Time magazine among other publications - is pictured in a Guantanamo Bay-style orange jump suit against a desert backdrop.
He reads out a purported "message to America" in which he tells Mr Obama: "I am paying the price of your interference with my life ...
"You've spent billions of pounds US taxpayers' dollars and we have lost thousands of our troops in our previous fighting against the Islamic State, so where is the people's interest in reigniting this war?"
The jihadist, believed to be a Briton nicknamed "John" by captives, says: "I am back, Obama, and I am back because of your arrogant foreign policy towards the Islamic State, because of your insistence on continuing your bombings and ... on Mosul Dam, despite our serious warnings.
"Just as your missiles continue to strike our people, our knife will continue to strike the necks of your people."
Dressed in black and wielding a short knife, the extremist also warns other governments against entering "this evil alliance of America against the Islamic State".
In a brief statement, a spokesman for Mr Sotloff's family said they "know of this horrific tragedy and are grieving privately".
The journalist was seized in Syria in August 2013 and had not been seen until he appeared in the video of Mr Foley's killing released by IS on August 20.
The video, which ends with a threat to another hostage who is said to be British, has surfaced in the week that world leaders will gather in Wales for a Nato summit.
A Liberal Democrat spokesman insisted both the exclusion measures and Tpims changes remained "under discussion".
On the exclusion idea, the spokesman said: "This issue remains under discussion in government and we have always said that we would be prepared to sign up to something that was both legal and practical.
"This is a very legally complicated issue and needs to be examined very closely."
On relocation powers, the spokesman added: " The issue of introducing relocation powers remains under discussion in government. We have agreed to look in detail at the options available to us.
"The Independent Reviewer of Terrorism Legislation, David Anderson, whose views we respect, recently recommended that the Government look at locational constraints that can be put on Tpims suspects to make it easier to disrupt their networks and to reduce the risk of absconding.
"As a result, the Liberal Democrats are willing to look in more detail at options, including at whether the use of exclusion zones under the existing legislation could be expanded to meet the concerns that Anderson raises."
Former defence secretary Liam Fox said Britain should join US in striking against IS bases.
He told the BBC: "I think we should be joining the United States in air strikes on their bases to diminish their military capability so that the countries who are our allies are able to deal with them more effectively on their own."