Al Qaeda kills British hostage in Mali

By Raissa Kasolowsky and Kate Kelland

DUBAI/LONDON (Reuters) - Al Qaeda's North African wing said on Wednesday it had carried out its threat to kill a British hostage it was holding in the Sahara.

Britain said it had reason to believe the hostage, Edwin Dyer, had been killed. Prime Minister Gordon Brown condemned the killing as "a barbaric act of terrorism" and said the killers would be hunted down.

An official source in Algeria, which has been the main focus of activities for al Qaeda's North African wing, told Reuters: "The Briton, according to our information, has been killed by AQIM (al Qaeda in the Islamic Maghreb) in Mali."

The group had said it would kill the Briton if the British government did not release Abu Qatada, a Jordanian Islamist it is holding in prison. A Spanish judge has named him as the right hand man in Europe for Osama bin Laden's al Qaeda network.

Dyer was killed on May 31 after a second deadline for the group's demands expired, it said in a statement on an Internet site used by al Qaeda-linked groups.

"The British captive was killed so that he, and with him the British state, may taste a tiny portion of what innocent Muslims taste every day at the hands of the Crusader and Jewish coalition to the east and to the west," the statement said.

The announcement of the killing came as U.S. President Barack Obama headed to the Middle East hoping to start mending U.S. ties with the Islamic world in a speech that will tackle issues including extremist violence.

"Al Qaeda's top messages are first, that a day before his expected speech to the Muslim world Obama must understand that al Qaeda is a force in the region that cannot be ignored," Hamid Ghomrassa, an expert in security issues who writes for Algeria's El Khabar newspaper, told Reuters.

"And second, that al Qaeda's threats should be taken seriously, and from now on the West should understand that paying ransoms to get back hostages is the only way to deal with (AQIM leader) Abdelmalek Droukdel," he said.

It was the first time AQIM has killed a hostage, though previously one woman died from illness while in captivity.

"This marks a big change," said Jeremy Keenan, author of 'The Dark Sahara -- America's War On Terror In Africa'.

The British Foreign Office said Dyer was kidnapped on the border between Niger and Mali in late January, but declined to give any more details about him.

MUSIC FESTIVAL

Dyer was one of a group of European tourists kidnapped after attending a festival of Tuareg culture.

Al Qaeda in the Islamic Maghreb has claimed responsibility for kidnapping two Canadian diplomats and four European tourists in the past five months.