Japan's Prime Minister Shinzo Abe speaks to the media at his official residence in Tokyo February 1, 2015. Islamic State militants released a video on Saturday which purported to show the beheading of Japanese journalist Kenji Goto, who the al Qaeda offshoot had been holding hostage. [Photo/Agencies]

A grim-faced Abe told reporters Japan would not give in to terrorism and said his country would work with international partners to bring those responsible for Goto's apparent killing to justice.

A White House spokeswoman said the United States was working to confirm the authenticity of the latest video and "strongly condemns" the militant group's actions.

The Islamic State threats to kill their Japanese hostages came after Abe announced $200 million in non-military aid for countries contending with Islamic State. His government has rejected any suggestion it acted rashly and stressed the assistance was humanitarian.

Addressing Abe, the militant in the video said: "Because of your reckless decision to take part in an unwinnable war, this knife will not only slaughter Kenji, but will also carry on and cause carnage wherever your people are found. So let the nightmare for Japan begin."