Correction: Islamic State story

1FILE - This image made from a militant video posted on a social media site on Wednesday, Aug. 5, 2015, which has been verified and is consistent with other AP reporting, purports to show a militant standing next to another man who identifies himself as 30-year-old Tomislav Salopek, kneeling down as he reads a message at an unknown location.
2An online image purports to show the Croatian hostage being held by an Islamic State affiliate in Egypt has been beheaded.
3FILE - In this Monday, June 16, 2014 file photo, demonstrators chant pro-Islamic State group slogans as they wave the group's flags in front of the provincial government headquarters in Mosul, 225 miles (360 kilometers) northwest of Baghdad, Iraq.
4An online image released Wednesday purported to show the Islamic State affiliate in Egypt had beheaded a Croatian hostage.
5FILE - In this Monday, Nov. 24, 2014, file photo, smoke billows behind an Islamic State group sign during clashes between militants from the Islamic State group and Iraqi security forces during a military operation to regain control of the town of Sadiyah, 60 miles (95 kilometers) north of Baghdad, Iraq in Diyala province, Iraq.
6An online image released Wednesday, Aug. 12, 2015, purported to show the Islamic State affiliate in Egypt had beheaded a Croatian hostage.
7FILE - In this June 23, 2014, file photo, fighters from the Islamic State group parade in a commandeered Iraqi security forces armored vehicle down a main road at the northern city of Mosul, Iraq.
8FILE - This file image made from video posted on a militant website Saturday, July 5, 2014, which has been authenticated based on its contents and other AP reporting, purports to show the leader of the Islamic State group, Abu Bakr al-Baghdadi, delivering a sermon at a mosque in Iraq during his first public appearance.
9FILE - This undated file image posted on a militant website on Tuesday, Jan. 14, 2014, which has been verified and is consistent with other AP reporting, shows fighters from the al-Qaida linked Islamic State of Iraq and the Levant (ISIL), now called the Islamic State group, marching in Raqqa, Syria.
10In a story Aug. 12 about a Croatian national reportedly beheaded by Islamic State militants, The Associated Press erroneously reported that Croatian troops fought as part of the U.S.-led coalition in Iraq.
11The Croatian troops were not part of the U.S.-led coalition in Iraq.
12They are, however, part of the NATO-led force in Afghanistan.
13CAIRO (AP) - A Croatian hostage abducted in Egypt by Islamic State militants has been beheaded, according to a gruesome image circulated Wednesday online - a killing that, if confirmed, would be the first of its kind involving a foreign captive in the country, undermining government efforts to project stability and buttress an economic turnaround.
14The killing of the 30-year-old oil and gas sector surveyor would deal a blow to President Abdel-Fattah el-Sissi's attempts to burnish the country's reputation a week after he unveiled a new extension of the Suez canal in a much-hyped ceremony attended by international dignitaries.
15It will also likely rattle companies with expatriate workers in Egypt and cast a cloud over hopes of boosting international investment and tourism following years of unrest in the wake of Egypt's Arab Spring uprising.
16The still photo, circulated by IS supporters on social media, appeared to show the body of Tomislav Salopek, a married father of two, wearing a beige jumpsuit like the one he wore in a previous video.
17A black flag used by the Islamic State group and a knife were planted in the sand next to his body.
18A caption in Arabic said Salopek was killed "for his country's participation in the war against the Islamic State," and came after a deadline had passed for Egypt to meet his captors' demands to free jailed Islamist women.
19The picture contained an inset of two Egyptian newspaper reports, one declaring Croatia's support for Egypt's war against terrorism and another noting Croatia's backing of the Kurds, who have been battling the IS group in Syria and Iraq.
20Croatian troops were not in Iraq as part of the U.S.-led coalition there but serve in the NATO-led force in Afghanistan.
21In a televised address to the nation, Croatian Prime Minister Zoran Milanovic said authorities there could not confirm the killing with certainty.
22"We cannot 100 percent confirm it is true, but what we see looks horrific. A confirmation may not come for several days," he said, adding that the search for Salopek will continue as long as there is a glimmer of hope.
23In remarks posted on the Egyptian Foreign Ministry's Facebook page, Foreign Minister Sameh Shoukry said authorities were working to verify the authenticity of the claim.
24In Salopek's hometown, anguished residents refused to believe the reports of his beheading.
25"No, no, no," Goran Blazanovic kept repeating as he sat in a cafe in Vrpolje, Croatia, with other grim-looking friends and family of the Croat captive, who kept searching their smartphones for signs that would give them hope that the reports were mistaken.
26"Nothing is proven," Blazanovic insisted.
27"We hope that he will come back home to his wife and children."
28Al-Azhar, the Sunni Muslim world's prestigious religious institute, condemned the apparent killing, calling it a "demonic act of which all religions and human traditions are innocent."
29The statement also said Islamic law stipulates that it is forbidden to shed the blood of foreigners.
30Exiled members of the Muslim Brotherhood, which Egypt brands a terrorist organization, said the beheading was a sign the government had failed to curb the rise of extremism.
31Concerns were also raised about the economic impact on the country.
32"It's obviously bad for the perceptions foreign investors have of Egypt, and I think it's probably bad for the perceptions that potential tourists have," said Hani Sabra, Middle East and North Africa head of the New York-based risk consultancy Eurasia Group.
33"This increases the perception that North Africa as a region is unstable across the board - Libya, Tunisia, Egypt," he said, adding that he didn't think it would undermine el-Sissi's government domestically.
34"This is something the authorities will use to advance the narrative that they've pushed that they are fighting ruthless, bloodthirsty terrorists," Sabra said.
35The Associated Press could not independently verify the image, though it bore markings consistent with the filmed hostage demand released last week by Egypt's Islamic State affiliate, the Sinai Province of the Islamic State.
36It was not clear where that video was shot.
37In that footage, the group set an Aug. 7 deadline for Egyptian authorities to free female Islamist prisoners detained in a sweeping government crackdown following the 2013 military ouster of the country's Islamist president.
38The videotaped demand was shot in the style of previous IS propaganda videos.
39The sister of an Egyptian woman jailed on charges of belonging to the Muslim Brotherhood, Esraa el-Taweel, said she spoke to her sister about the threat against Salopek's life during a recent prison visit.
40"She rejected that the life of an innocent man who is not responsible for other detainees be negotiated," said Doaa el-Taweel.
41"She rejected the whole thing."
42As last week's deadline passed, security forces were searching for Salopek across the country, focusing on the western provinces of Matrouh and Wadi Gedid, which border Libya, as well as Beheira in the Nile Delta and Giza, part of greater Cairo, an Egyptian security official said.
43Speaking on condition of anonymity because he wasn't authorized to talk to journalists, he said Salopek's driver, who was left behind by the kidnappers, said the gunmen who seized the Croat on a highway west of Cairo had Bedouin accents.
44That suggests they could have come from a variety of isolated places in Egypt, including the restive northern Sinai Peninsula, where Egypt's Islamic State affiliate is based, or the vast Western Desert, which is a gateway to volatile and lawless Libya, home to its own Islamic State branch.
45Salopek, a surveyor working with France's CGG Ardiseis, was abducted on July 22.
46The company has an office in the leafy Cairo suburb of Maadi, where many expatriates and diplomats live.
47Egypt has seen an increase in violence since the ouster of Islamist President Mohammed Morsi, with attacks by suspected Islamic extremists in both the Sinai Peninsula and the mainland focusing primarily on security forces.
48But this would be the first time the local Islamic State affiliate has captured and then beheaded a foreigner in Egypt, a major escalation as the country tries to rebuild its crucial tourism industry after years of unrest following the 2011 revolt that toppled autocrat Hosni Mubarak.
49Last December, the affiliate claimed responsibility for the killing of an American oil worker with the Texas-based energy company Apache Corp, which had reported that one of its supervisors was killed several months earlier in an apparent carjacking in the Western Desert.
50Militants have also targeted foreign interests, including the Italian Consulate, which was hit with a car bomb last month.
51That attack came two days after another bomb killed Prosecutor General Hisham Barakat in an upscale Cairo neighborhood.
52The Islamic State group holds about a third of Iraq and neighboring Syria in its self-declared "caliphate."
53In Syria, IS militants have killed foreign journalists and aid workers, starting with American journalist James Foley last year.
54In Libya, an IS affiliate released a video in February showing its fighters beheading a group of Coptic Christians from Egypt, and in April, another showing them beheading and shooting to death groups of Ethiopian Christians.
55Another video, released in February, showed them burning to death a Jordanian pilot who was captured when his F-16 crashed during a U.S.-led air raid last year.