Islamic law allows those holding non-Muslim prisoners to kill, ransom, enslave or release them, depending on what they judge to be best for Islam. From The Australian, with thanks to Rosie:
A GROUP led by al-Qaeda in Iraq said it had decided to kill four Russian hostages after Moscow failed to meet demands to withdraw from Chechnya and free Muslim prisoners, according to an Internet posting.
“After granting the Russian Government 48 hours to meet our demands and their failure to do so … the Islamic court of the Mujahideen Shura Council ruled to kill them (hostages),” said the statement posted on a website often used by militants.
“And let them be an example for those who follow them and challenge the mujahideen and dare to step foot in the land of honour, Iraq.”