In videotape sent to Aljazeera, an Iraqi group calling itself Al-Tawhid wa Al-Jihad says it has executed one of the two Bulgarian captives it seized last week.
The group said it would kill the second captive within 24 hours unless its demands were met.
On 9 July, the group claimed it had captured the two men in Iraq and said it would execute them unless US-led occupation forces in Iraq released all Iraqi detainees.
The deadline was extended numerous times as Bulgarian authorities attempted to negotiate the captives' release.
The wives of the two men, identified by Bulgarian authorities as civilian truck drivers Ivailo Kepov and Georgi Lazov, made several videotaped appeals to the captors through Aljazeera news broadcasts.
**Bulgaria unmoved***
Bulgarian Foreign Minister Solomon Passy made clear earlier in the week that Bulgaria's staunchly pro-US policy would not change as a result of the drivers' capture.
"Bulgaria is a stable state with a predictable foreign policy and we cannot expect it would change its foreign policy because of one or another group," Passy told state radio.
The company which employed the men in Iraq had on 9 July announced that it was suspending operations in Iraq.
**Countdown for Egyptian***
Meanwhile, another group thought to be the National Islamic Resistance has threatened to kill its Egyptian captive, Muhammad al-Gharabawi, within 72 hours unless the Saudi company he worked for pulls out of Iraq.
Al-Gharabawi, in his 50s, was abducted while delivering petrol products to US forces in Iraq by a group that it said represented the "legitimate Iraqi resistance", Aljazeera reported last week.
Faisal al-Nahait, who owns the transport firm where al-Gharabawi had worked for eight years, said unidentified callers had telephoned him several times since Wednesday demanding money.
He urged Egyptian authorities to help secure the driver's freedom.
**PHOTO CAPTION***
Bulgarian Foreign Minister Solomon Passy arrives at the Foreign Ministry building in Sofia to take part in an Iraq hostage crisis council early July 14, 2004. (REUTERS)