others saw the murder of a civilian trying to drum up business in Iraq as shameful.
A video showing the beheading of a man identified as Nicholas Berg, 26, from Pennsylvania, was posted on an Al-Qaeda-linked web site Tuesday.
Islamic militants said he was slain in revenge for abuses at the US-run Abu Ghraib jail, but many Iraqis blamed Americans as the root cause for the crime by not lifting the country out of the ashes of war and poverty.
"As Muslims we cant accept it, but we dont blame them. It was a natural reaction to the human rights violations we have seen at Abu Ghraib. What the Americans are doing now is terrible," said a 45-year-old woman dentist who refused to give her name.
Seven US soldiers have been charged with abusing prisoners at the jail on the western outskirts of Baghdad, after photographs of Iraqis being forced to assume sexual positions and prisoners chained on leads like dogs shocked the world.
"Since the man came here to do something good for Iraq, it was shameful. Whoever comes to serve this country will be treated kindly by Iraqis, but I blame the Americans for being behind such activities," said restaurant worker Falah Faisal, 30.
"As we get nearer to June 30, the Americans are trying to destabilise Iraq. If they were sincere, they would not allow such things to happen in Baghdad," he added, referring to the scheduled transfer of a semblance of Iraqi self-rule by the US-led coalition.
But Muaid Louis Abdullah Ahhad, a Christian who owns a photo shop, denounced the execution and blamed followers of wanted Al-Qaeda militant Abu Mussab al-Zarqawi for the beheading.
Zarqawi, who has a bounty of 10 million dollars on his head, is accused by Washington of leading a network in Iraq that has carried out attacks against the US-led coalition and civilians aimed at fanning civil conflict.
The video of Berg's killing was entitled "Abu Mussab al-Zarqawi slaughtering an American", though it was not clear if he was involved.
"These people arent Muslims. They are just using Islam as a cover and are harming the reputation of this religion," said a 50-year-old Shiite engineer for Iraqi Airways who also refused to give his name.
"I didnt know about it, but if he was an American, he was innocent. He came to Iraq on a mission to help Iraqis," said Ali Abu Nabi, a 29-year-old house painter.
But his friend, Ahmed Taleb, 24, a kiosk owner, poured scorn on the Americans, saying they had done nothing to rebuild the country.
"Its the poverty thats leading these criminals to act in such a way," he said.
Others were sceptical.
"Im not sure the report is reliable. It could be untrue. It was just a piece of news. Nothing was broadcast. Even if it was true, it must have been saboteurs who came from outside (Iraq)," said a man who refused to give his name.
"It couldnt have been Iraqis," he insisted.
"I worry this will happen again, of course," said administrator Ammar Akram, 39.