David Cameron has said Britain will not pay a ransom for a UK hostage who Islamic State extremists are threatening to kill.
The Prime Minister told Sky News it was a "desperately difficult situation", but insisted it was the right policy as the money would be used by militants to fuel the conflict.
He also repeated his warning that the terror group posed a direct threat to the UK, and stressed the need to "squeeze it out of existence".
Mr Cameron was speaking as world leaders met at Newport in Wales for the two-day Nato summit where the crises in Iraq and Ukraine will dominate talks.
Two US journalists have been murdered by IS jihadists, who are now threatening the life of a British hostage.
Mr Cameron said: "It's a desperately difficult situation."
But he added: "We don't pay ransoms to terrorists when they kidnap our citizens.
"On other occasions, payments have been made and sometimes I think governments have turned a blind eye and I think that is deeply regrettable.
"From the intelligence and other information I have seen, there is no doubt this money helps to fuel the crisis that we see in Iraq and Syria."
Mr Cameron said Britain was offering support to the moderate Syrian opposition and to the Iraqi government to help them in their battle against IS in both countries.
"This is an organisation which is a direct threat to our country.
"The world would be a safer place if we could squeeze this organisation out of existence."
But asked whether the UK was ready to work with Syrian president Bashar Assad to take on the militant group, Mr Cameron said: "I think President Assad is part of the problem, not part of the solution."
Speaking ahead of the summit, Nato Secretary General Anders Fogh Rasmussen said: "In today's world we are, so to speak, surrounded by an arc of crisis.
"To the east, to the southeast, to the south - and at this summit we will address the whole range of security challenges and improve Nato's ability to act swiftly if needed."
The 28 Nato leaders have also agreed to meet Ukrainian President Petro Poroshenko to hear what support his country wants. It is also a symbolic sign of solidarity which will not be lost on the Kremlin.
Nato is under pressure to harden its response to Russian incursions into Ukraine.
Plans for a new Rapid Reaction Force will be finalised. It will number around 4,000 troops, on notice to deploy within 48 hours.
Logistic and planning teams will be stationed in Poland and the Baltic States along with key equipment to speed up any deployment.
As many as 10,000 delegates and advisers, and 1,500 journalists, make this the largest international gathering of its kind to be staged in the UK.
They will be guarded under heavy security by 9,000 police officers. A fence, 12 miles long and 9ft high, makes up a ring of steel that will include road closures and checkpoints to prevent a terrorist attack.
This will be the first Nato summit held in the UK since the collapse of the Soviet Union - the last time the Alliance gathered in these shores was in London in 1990.
The summit was intended to mark the end of combat operations in Afghanistan, but this has been overshadowed by events in Ukraine, Syria, Iraq and elsewhere.
https://uk.news.yahoo.com/nato-discuss-response-iraq-ukraine-220515774.html
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