Businessman and reality TV show Duck Dynasty star Phil Robertson has said members of the Islamic State (formerly known as Isis) must be "either converted or killed".

Robertson made the comment during an interview with Fox News on Tuesday evening.

"You either have to convert them — which I think would be next to impossible," he said to host Sean Hannity.

"I'm not giving up on them, but I'm just saying, either convert them or kill them."

He then compared the insurgents to "street thugs on steroids."

Robertson's comments came shortly after IS released the video of American journalist Steven Sotloff's beheading.

'Justice will be served'

The video follows previous footage which showed American photojournalist James Foley being decapitated by the same IS fighter who murdered Sotloff. The beheader is believed to be a British man.

The two videos prompted US President Barack Obama to publicly address the insurgents, warning that "justice will be served".

"We will not be intimidated. This horrific act only unites us," he added. "And those who make the mistake of harming Americans will learn that we will not forget and our reach is long."

IS started their offensive against the Iraqi government last June, prompting more than 800,000 people to flee the occupied areas.

The insurgents, who already control large areas of Iraq and Syria, are attracting dozens of young fighters from abroad.

Rights watchdog Amnesty International accused the group of committing war crimes against minorities in northern Iraq, where hundreds of people from the Yazidi community are systematically abducted and executed.