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 In a video released by his captors, Gourdel, a 55-year-old from
Nice, is seen kneeling with his arms tied behind his back before
four masked militants who read out a statement in Arabic criticising
France's intervention.
They then pushed him on his side and held him down. The video does
not show the beheading, but a militant later holds the head up to
the camera.
"This is why the Caliphate Soldiers in Algeria have decided to
punish France, by executing this man, and to defend our beloved
Islamic State," one of the militants says in the statement he read
out.
France's President Francois Hollande confirmed the death of Gourdel,
and vowed that French military operations against Islamic State
would continue.
"Our compatriot has been killed cruelly and in a cowardly way by a
terrorist group. Herve Gourdel was assassinated because he was
French," Hollande, visibly shaken by the events, said at the United
Nations. "My determination is total, and this aggression only
strengthens it. France will continue to fight terrorists everywhere.
The operations against Islamic State will continue."
 The Caliphate Soldiers, a splinter group linked to Islamic State
militants in Iraq and Syria, had on Monday published a video
claiming responsibility for the abduction and showed the man
identifying himself as Gourdel.
The kidnapping had come after Islamic State spokesman Abu Muhammad
al-Adnani urged the group's followers to attack citizens of the
United States, France and other countries that joined the coalition
to destroy the radical group.
Just before the militants gave their statement in the video, the
Frenchman told his family that he loved them.
There was no immediate comment from Gourdel's relatives, but a
friend, Eric Grinda, told France's i-Tele television: "They want to
fan the flames of hatred and to make us want to respond. They only
are able to do one thing, assassinate a man on his knees with his
hands tied ... My sadness is immense."
France launched its first air strikes targeting Islamic State
targets in Iraq on Friday. It has said all must be done to rid the
region of the group.
France raised the threat level at 30 of its embassies across the
Middle East and Africa on Monday.
DEEPENING ISLAMIST RIVALRIES
Western diplomats and intelligence sources say they believe there
are fewer than 10 Western hostages still held by Islamic State. The
group has recently beheaded two Americans, James Foley and Steven
Sotloff, and one Briton, David Haines, and threatened to kill
another Briton, Alan Henning.
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The Frenchman's kidnapping was one of the first abductions of a
foreigner by militants in Algeria since the North African country
ended its decade-long war with Islamist fighters in the 1990s.
There have, however, been many attacks in the Maghreb region carried
out by armed Islamists. In January 2013, al Qaeda-linked militants
took more than 800 people hostage at a gas facility near In Amenas,
Algeria. Algerian special forces raided the site, but 40 workers
were killed, all but one of them foreigners, along with 29
militants.
Gourdel, a French nature guide and photographer, was taken hostage
when militants stopped his vehicle in the remote mountains east of
Algiers where he planned a hiking trip, according to Algeria's
interior ministry.
Algerian troops had launched a search for Gourdel in the mountains
in an area known as the "Triangle of Death" during the bloody days
of Algeria's 1990s war with Islamists. Though attacks from Islamists
are rarer, al Qaeda in the Islamic Maghreb and other groups are
still active.
The Caliphate Soldiers group earlier this month announced it had
broken with al Qaeda in the Islamic Maghreb, known as AQIM, to back
Islamic State, in another illustration of deepening rivalries
between Islamic State and al Qaeda's core leadership.
AQIM central region commander Khaled Abu Suleimane, who claimed
leadership of the Caliphate Soldiers, is a hardliner who has
consistently refused peace agreements with the government and traces
his militant roots back to the 1990s war.
In that war, 200,000 were killed, as militants fought a bloody
campaign - cutting throats, massacring villages and kidnapping
civilians - to overthrow the government and install an Islamic state
in Algeria.
(Reporting by Patrick Markey; Additional reporting by John Irish in
Paris, Lamine Chikhi in Algiers; Editing by Will Waterman)
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