The decapitated body of an Asian man shown in a video shot in Baghdad appears to be that of missing Japanese backpacker Shosei Koda.
The video showed the severed head of a Japanese-looking man which resembled photographs of Mr Koda. Iraq's Interior Ministry said it could be that of the kidnapped Japanese backpacker.
Iraqi police found the headless body of the Asian man in Baghdad on Saturday.
"There is a possibility that this is the body of the Japanese hostage, but it has yet to be identified," an interior ministry spokesman said, referring to Mr Koda.
A news agency pool video obtained in Baghdad showed the corpse in a white blood-soaked shirt and the severed head of a Japanese-looking man with a thin beard on top.
A person can then be seen lifting the head up by its long black hair and holding it up to the camera.
The face closely resembled Mr Koda, who appeared on another video on Tuesday seated in front of three masked men.
That video, posted on a Web site often used by militants clearly showed Mr Koda, also with long hair and a thin beard.
Japan's Foreign Ministry said it was checking the report. "We are trying to find out the facts," an official said.
Confusion has surrounded Mr Koda's fate since al Qaeda ally Abu Musab al-Zarqawi's militant group said on Tuesday it would behead the 24-year-old within 48 hours unless Japan pulled its troops out of Iraq, a demand swiftly rejected by Tokyo.
A beheaded body found in Iraq on Friday was initially thought to be that of Mr Koda, abducted while on holiday, but was later identified as an Iraqi man. Another corpse described as Asian-looking also turned out not be Mr Koda's.
The Interior Ministry spokesman said the latest body, and the decapitated head, had been taken to Karameh hospital in Baghdad. It was found around Haifa street, a dangerous area in central Baghdad insurgents are active.
At least 25 foreigners from a dozen countries are thought to be in the hands of kidnappers trying to drive US-led forces and foreign workers from Iraq. Scores of foreigners have been abducted since April.
Many have been freed but more than 35 have been killed, several of them beheaded.