The White House has confirmed that US President Barack Obama has ordered a review of policy related to the efforts to free American hostages held by militants in foreign territories.

The review was ordered after three American hostages were executed by militants from the Islamic State (Isis) in recent months.

"The administration's goal has always been to use every appropriate resource within the bounds of the law to assist families to bring their loves ones home," White House National Security Council spokesman Alistair Baskey said in a statement on Tuesday.

"In light of the increasing number of US citizens taken hostage by terrorist groups overseas and the extraordinary nature of recent hostage cases.

"This summer President Obama directed relevant departments and agencies, including the Departments of Defence and the State, the FBI, and the Intelligence Community, to conduct a comprehensive review of how the US government addresses these matters."

The administration would "continue to bring all appropriate military, intelligence, law enforcement and diplomatic capabilities to bear to recover American hostages. Those efforts continue every day."

Militants with IS released a video on Sunday announcing the death of Peter Kassig, a humanitarian worker and former US Army Ranger. Kassig was the third US citizen to be beheaded by the group, after two freelance journalists James Foley and Steven Sotloff were executed in recent months.

Two British aid workers, Alan Henning and David Haines, have also been executed by militants from the same group.

US news network ABC News reported that a Pentagon official had written to a US Representative that the review would focus "on examining family engagement, intelligence collection, and diplomatic engagement policies."

Despite the series of executions, it has remained US policy not to pay ransom for its citizens that have been taken hostage by foreign terrorist groups.