A Web site linked to an Iraqi militant group showed a video of what was purported to be the killing of 12 Nepalese workers by militants who had kidnapped them.
Nepalese Foreign Minister Prakash Sharan Mahat said officials were still checking on the reports.
In a village south of the Nepalese capital, relatives informed of the Web site pictures by reporters said they were shocked and accused the government of not trying hard enough to free the hostages.
The video showed a masked man in desert camouflage apparently slitting the throat of a blindfolded man on the ground.
Other footage showed a man firing single shots from an assault rifle at the back of the heads of 11 others.
The 11 were prone in a row in what appeared to be a ditch.
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