LONDON/BAGHDAD (Reuters) - A British Muslim leader called for action on Thursday to tackle a jihadi sub-culture after an Islamic State video showed a suspected Briton beheading U.S. journalist James Foley, held hostage in Syria.

In Washington, U.S. Defense Secretary Chuck Hagel said the threat from Islamic State was “beyond anything we’ve seen” and the U.S. Justice Department opened a criminal investigation into the death of Foley on the video, which featured a masked man speaking English with a British accent.

As Western officials tried to identify the man, the Muslim Council of Britain denounced Foley’s “abhorrent murder” and one of its advisers urged anyone who knows the killer’s identity to contact the police.

Horror at the video spanned from the West to Baghdad, where Iraqis asked why the United States and its allies had not cracked down on Islamic State fighters long before they captured large areas of Syria and Iraq.

Foley, 40, was beheaded by an Islamic State militant in the video that surfaced on the Internet on Tuesday, and officials in Washington revealed that U.S. special forces had tried unsuccessfully to rescue him along with other American hostages earlier this summer.

A firefight between the U.S. forces and Islamic State militants during the rescue attempt appeared to be the first direct ground engagement between the two sides.

The video caused particular shock in Britain, which is home to about 2.7 million Muslims, although the hundreds of British men fighting alongside the militants in Iraq and Syria have created concern for some time.

Iqbal Sacranie, an adviser to the Muslim Council of Britain, said Britons from across the country’s communities had to stop young men being seduced by radical ideologies.

“This sub culture of this ‘jihadi-cool’ - as they call it in the media - within the margins of society ... that is the real challenge,” he told BBC Radio. “This is a problem that affects all of us and it will only be dealt with more effectively if all of us are working together on this.”

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Sacranie said the Muslim community was pushing the message that “this is totally alien to Islam” and families were reporting to the authorities when they discovered their sons had headed to the Middle East to fight. He also told London’s Evening Standard newspaper that anyone who recognized the man in the video had a duty to contact police.

JOHN, PAUL AND RINGO

The Guardian newspaper said a former hostage had identified the masked man as the leader of three Britons who guarded foreign hostages in the city of Raqqa - Islamic State’s stronghold in eastern Syria.

The BBC also reported that hostages had nicknamed their three captors John, Paul and Ringo, after members of the Beatles pop group.

Ghaffar Hussain, managing director of the counter-extremism Quilliam Foundation, said it was almost inevitable that men who had fought in Syria would return to plan attacks in Europe.

“It is disturbing that people born and raised in Britain and who have gone to the same schools as us could have been essentially indoctrinated to the extent where they can justify raping women and chopping heads off,” he said.

Four British Islamists - two of whom had been to al Qaeda training camps in Pakistan - killed 52 people in suicide bomb attacks on London in July 2005, and Britons have previously appeared in graphic Islamist videos.

Until recently, Islamic State concentrated on establishing its self-proclaimed caliphate in areas of Syria and Iraq it had seized rather than on attacking the West, like al Qaeda - the group from which it split.

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But U.S. President Barack Obama’s decision to order air strikes on its fighters in Iraq appears to have changed this. The beheading video also showed images of another U.S. journalist, Steven Sotloff, whose fate the group said depends on how the United States acts in Iraq. “The life of this American citizen, Obama, depends on your next decision,” the masked man says.

In a Washington briefing on Thursday, Hagel said Islamic State was as sophisticated as any group the United States had seen and posed an imminent threat “to every interest we have, whether it’s in Iraq or anywhere else.”

“They are beyond just a terrorist group. They marry ideology, a sophistication of ... military prowess,” Hagel said. “They are tremendously well-funded. This is beyond anything we’ve seen.”

General Martin Dempsey, chairman of the U.S. Joint Chiefs of Staff, suggested Islamic State would be a danger until it could no longer count on safe havens in Syria.

“This is an organization that has an apocalyptic, end-of- days strategic vision and which will eventually have to be defeated,” Dempsey said.

“To your question, can they be defeated without addressing that part of their organization which resides in Syria? The answer is no. That will have to be addressed on both sides of what is essentially at this point a non-existent border.”

In Baghdad, Iraqis expressed their horror at the video of Foley’s killing and questioned Western strategy on Islamic State, which advanced out of Syria in June to capture several major Iraqi cities, including Mosul, before the United States intervened militarily.

“The killing is the crime of all crimes, whoever the victim is,” said Kareem Jamal, 55, an Arabic language teacher at a secondary school.

“I wish the world superpowers had fought these criminal groups in their incubators. The U.S. should have hit Islamic State when they first appeared in Syria. Why didn’t they hit them when they first entered Mosul and other cities?”

Ali Mohammed Saeed, a 35-year-old doctor, called for deeper Western involvement, almost three years after U.S. troops pulled out of Iraq. “Air strikes are not enough, those criminals need ground troops to kill them and kick them out.”

British Prime Minister David Cameron has ruled out sending troops to step up Britain’s military involvement in Iraq, which has so far been focused on delivering supplies to Kurdish forces fighting Islamic State and using jets to conduct surveillance.