An online image purports to show a Croatian hostage held by Islamic State's Egyptian affiliate beheaded.
The still image, shared by IS sympathisers on social media, showed the apparent body of Tomislav Salopek, a married, 30-year-old father of two, wearing a beige jumpsuit looking like the one he had worn in a previous video. A black flag used by IS and a knife were planted in the sand next to him.
The photo carried a caption in Arabic that said Mr Salopek was killed "for his country's participation in the war against the Islamic State", and after a deadline had passed for the Egyptian government to meet their demands.
This comes after the IS affiliate set a Friday deadline for Egyptian authorities to free "Muslim women", a term referring to female Islamist prisoners detained in a sweeping government crackdown following the 2013 military ouster of an Islamist president.
The picture also contained an inset of two Egyptian newspaper reports, with one headline declaring Croatia's support of Egypt in its war against terrorism and extremism and another saying Croatia reiterated its support for the Kurdistan region.
IS holds about a third of Iraq and neighbouring Syria in its self-declared "caliphate". In Syria, IS militants have killed foreign journalists and aid workers, starting with American journalist James Foley in August last year.
Mr Foley's taped beheading was followed by the killing of American-Israeli journalist Steven Sotloff, British aid workers David Haines and Alan Henning, American aid worker Peter Kassig, as well as Japanese nationals Haruna Yukawa and Kenji Goto.
Croatia's President Kolinda Grabar-Kitarovic has expressed her deepest sympathy to the family of Salopek but noted that his death has not been confirmed.
She said: "In these moments of deep uncertainty, I am sympathising with the family, parents and friends of Tomislav Salopek."
She also added that she wants to "firmly state that, as long as there is a glimmer of hope, one little crumb of chance that Tomislav is alive, we are continuing to work, continuing the search and continuing efforts to save his life".
In Salopek's home town of Vrpolje, a family representative said everyone was "deeply stricken and in shock" over the news.
Croatian Prime Minister Zoran Milanovic said confirmation of Salopek's death "may not come for several days".
In an address to the nation on Croatian television, he also urged people not to expose their children to the gruesome image of Salopek's body posted online and not to distribute it.
He also appealed for calm.
Egypt's Al-Azhar institute, the top centre of religious learning for Sunni Muslims, has condemned the apparent killing, calling it a "demonic act" contrary to all religion.