A disturbing video showing beheading of American journalist Steven Sotloff by dreaded terror group ISIS is authentic, US officials said today.

The Islamic State militants released the video yesterday. Sotloff is the second American journalist to be executed by by ISIS in two weeks.

"The US intelligence community has analysed the recently released video ... and has reached the judgment that it is authentic," said Caitlin Hayden, the spokeswoman for the National Security Council.

In the video, Sotloff kneels in the desert, dressed in an orange prison-style jumpsuit.

A masked "executioner" lords over him, wielding a knife. ISIS blames President Barack Obama's decision to conduct airstrikes against the militant group in Iraq for the killing.

The Islamic State has thrived and mutated during the civil war in Syria. It swept into Iraq in June, seizing large swaths of the country's Sunni-dominated northern and western provinces.