Beheaded Japanese to be flown home
 |  Shosei Koda is shown with his captors in this video released on a militant Islamist Web site Wednesday. |
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 Hostage killing puts new pressure on Japan's government.
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TOKYO, Japan (CNN) -- The body of a Japanese man beheaded by his Iraqi captors hostage is being returned to Tokyo.
Shosei Koda was found in Baghdad on Saturday wrapped in an American flag after Japan refused hostage-takers' demands to pull troops from the country.
The death of Koda, who was kidnapped last Tuesday, puts renewed pressure on Prime Minister Junichiro Koizumi, who must soon decide whether to extend Japan's deployment of 550 troops beyond December.
Koizumi expressed condolences to Koda's family, and said he had a feeling of indignation over the killing.
"It is an evil act of terrorism to kill innocent civilians. We feel deep indignation and we can never forgive this terrorist act," Koizumi said.
Koizumi also vowed to stay the course in Iraq.
"We cannot lose to terrorism, we must not yield to brute force. I believe we should continue to support the Iraqi people's efforts to rebuild their country," Koizumi told reporters.
The United States immediately denounced the killing and commended Tokyo for not bowing to terrorism.
"We strongly condemn this heinous crime. There is no justification for acts like this," U.S. Ambassador to Japan Howard H. Baker Jr. said in a statement.
Asked what would be done about Japanese troops in Iraq, Foreign Minister Nobutaka Machimura said the issue was undecided.
Their tour of duty was to end December 14, but Japan had agreed to an extension. That decision is now being reevaluated.
The discovery of Koda's body came shortly after it was confirmed that another body -- found in Balad, north of Baghdad -- was not that of Koda.
The U.S. military airlifted the remains of the Balad body to Kuwait on Saturday, where it was examined by a doctor at the Japanese Embassy.
An Islamist Web site used by the group led by wanted terrorist Abu Musab al-Zarqawi had posted video of Koda shortly after the abduction.
Koda was seen kneeling in front of three masked militants dressed in black and calling on Koizumi to help him.
At one point, Koda looked down and one of the militants grabbed him by his hair to force him to look up at the camera.
"We grant the Japanese government 48 hours to withdraw its troops from Iraq or this infidel will be beheaded," one of the militants said.
The group that issued the statement called itself the Qaeda of Jihad, a new name for al-Zarqawi's group following a recent pledge of loyalty to Osama bin Laden. His group had previously been known as Unification and Jihad.
The network has carried out numerous abductions and has beheaded many of its captives.
Al-Zarqawi's group issued online warnings in recent months that citizens of Japan and other countries would be at risk if they were to come to Iraq.
Koizumi has been one of the strongest backers of the U.S.-led effort in Iraq, with his country contributing about $500 million in aid to Iraq and also playing host to a donor's conference to try to garner more financial support for reconstruction.
However, that position has put him at odds with much of his country, where a majority of Japanese people polled opposed his decision to send troops to Iraq.
Japan's constitution doesn't allow troops to take part in combat, so they have been working in southern Iraq on humanitarian missions.
CNN's Atika Shubert contributed to this report
