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Militants demanded $132.5m ransom for release of James Foley

By David Usborne and Tom Harper

The United States has unleashed a new aerial barrage against jihadist positions in northern Iraq in a clear sign that Barack Obama will not be deterred by the beheading of American reporter James Foley.

It has also emerged that the militants who beheaded Mr Foley had demanded a ransom of $132.5m (£80m) for his release.

Two US officials said the demands were sent in emails to Mr Foley's family in New Hampshire. Separately, Mr Foley's former employer said that the militants first demanded the money late last year.

Meanwhile, a French journalist held prisoner for months with Mr Foley has claimed he has a "rough" idea as to the identity of the suspected British killer.

Didier Francois, who was released earlier this year, said the video of the suspected London-born jihadist known as 'John' brought back memories of being chained up with the journalist.

Mr Francois (53) spoke out as the US joined Scotland Yard in the international manhunt for 'John'. Eric Holder, the US Attorney General, revealed the Department of Justice had approved an "open criminal investigation" into the death of Mr Foley, who is thought to have been killed by a gang of three British terrorists.

When asked on radio station Europe 1 whether he knew the identity of 'John', Mr Francois replied: "Recognised is a very big word, but I see roughly who it is."

Elsewhere, US officials confirmed that six strikes were carried out near Mosul Dam, which was retaken from Isis militants this week by a combined Kurdish and Iraqi force.

A video of the murder of Mr Foley – which first surfaced on Tuesday – included a chilling narration saying he was being killed in direct response to the US air strikes.

The video also warned that further killings would follow if the attacks did not end and specifically identified the captive journalist Steven Sotloff as being the next victim in line.

It is believed that Isis, which now styles itself as the Islamic State, may be holding an additional two US journalists, whose whereabouts and fate are also of urgent concern in Washington.

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