* Video threatens man group says is a British hostage
* Group warns other nations off alliance with America
* Same purported executioner speaks in Islamic State video (Adds details of video, U.S. comment)
DUBAI, Sept 2 (Reuters) - The Islamic State released a video purporting to show the beheading of American hostage Steven Sotloff, a monitoring service said on Tuesday, as the militant group raised the stakes in its confrontation with Washington over U.S. air strikes on its fighters in Iraq.
A masked figure in the video also issued a threat against a British hostage, a man the group named as David Haines, and warned governments to back off "this evil alliance of America against the Islamic State", the SITE monitoring service said.
The purported executioner appeared to be the same British-accented man who appeared in an Aug. 19 video showing the killing of American journalist James Foley, and it showed a similar desert setting. In both videos, the captives wore orange jumpsuits.
"I'm back, Obama, and I'm back because of your arrogant foreign policy towards the Islamic State, because of your insistence on continuing your bombings and ... on Mosul Dam, despite our serious warnings," the man said.
"So just as your missiles continue to strike our people, our knife will continue to strike the necks of your people."
In the video, Sotloff describes himself a "paying the price" for the U.S. intervention in Iraq with his life.
APPEAL
Sotloff, a freelance journalist, was kidnapped in Syria in August 2013. Sotloff's mother Shirley appealed on Aug. 27 in a videotaped message to Islamic State's self-proclaimed caliph, Abu Bakr al-Baghdadi, for her son's release.
In the video it released last month, Islamic State said Foley's death was in retaliation for U.S. air strikes on its fighters in Iraq.
The United States resumed air strikes in Iraq in August for the first time since the end of the U.S. occupation in 2011.
The raids followed major gains by Islamic State, which has declared an Islamic Caliphate in areas it controls in Syria and Iraq.
In Washington, the White House said it could not immediately confirm that Islamic State had released a video of Sotloff's beheading.
State Dept spokeswoman Jen Psaki said the U.S. intelligence services would "work as quickly as possible to determine its authenticity."
"If the video is genuine we are sickened by this brutal act taking the life of another innocent American citizen. Our hearts go out to the Sotloff family."
A source familiar with the matter said that while U.S. officials have yet to formally confirm the validity of the video, it appeared to be authentic.
The United States is taking the Islamic State militants far more seriously now than it did six months ago, when Obama told the New Yorker magazine that they were the "JV team," which is short for "junior varsity" and means they are not the best players on the field.
On Aug. 24 al Qaeda-linked militants from the Nusra Front armed group in Syria freed an American writer, Peter Theo Curtis, who had been missing since 2012 following what officials said were efforts by the Gulf Arab state of Qatar to win his release. (Reporting by William Maclean, Noah Browning and Mark Hosenball; Editing by Angus MacSwan and Giles Elgood)
Our Standards: The Thomson Reuters Trust Principles.
