WASHINGTON -- By rejecting demands for a nine-digit payment to save kidnapped American journalist James Foley, the United States upheld a policy choice that some European and Arab governments have long found too wrenching to make themselves: ruling out ransom to rescue any citizen held captive by militant organizations, in hopes the tough stand will make Americans safer from kidnapping and attacks by extremists.
Foley's beheading by the Islamic State extremist group intensified a debate within the Obama administration and with American allies abroad about whether to pay ransoms to al-Qaida and other organizations, at the risk of encouraging more abductions and funding militancy.
For al-Qaida and some other militant bands, ransoms paid to free kidnapped Europeans over the past decade have surpassed donations from private supporters as a source of funding, according to the United States and Britain.
The British government, like the U.S., adheres to a longstanding policy against paying ransoms to extremists.
Foley's Islamic State captors had demanded $132.5 million (100 million euros) from his parents and political concessions from Washington. Neither obliged, authorities say.
The Islamic State also demanded a $132.5 million ransom each for two other American hostages the militants are holding, according to a person close to the situation who spoke late Thursday on condition of anonymity because he was not authorized to discuss the information by name. The demand to the families of each hostage came only once, late last year.
Foley, 40, a freelance journalist from New Hampshire, was killed within the past week inside Syria, where he had been held since his disappearance there in November 2012. Extremists revealed his death in a video released Tuesday showing his beheading.
Extremists said they killed Foley in retaliation for what by Thursday were 90 U.S. airstrikes since Aug. 8 targeting Islamic State positions in northern Iraq. But the ransom demands began late last year, even before the Islamic State, one of the world's most financially prosperous extremist groups, had begun its brutal march across much of western and northern Iraq.
Whether or not it was their primary motive in killing the freelance reporter, the Islamic State militants -- already savvy self-promoters on Twitter and in slickly produced videos -- since then have moved squarely to the front of the U.S. agenda and international attention, said Matthew Levitt, a counterterror expert at the Washington Institute think tank.
It's "the kind of coverage you can't really buy," Levitt said. "From their perspective, this has been a tremendous success."
A senior Obama administration official said Thursday the Islamic State had made a "range of requests" from the U.S. for Foley's release, including changes in American policy and posture in the Mideast.
At the State Department, deputy spokeswoman Marie Harf said the militancy -- which controls a swath of land across northern Syria and Iraq -- has collected millions of dollars in ransoms so far this year alone.
"We do not make concessions to terrorists," Harf told reporters. "We do not pay ransoms."
"The United States government believes very strongly that paying ransom to terrorists gives them a tool in the form of financing that helps them propagate what they're doing," she said. "And so we believe very strongly that we don't do that, for that reason."
The issue of payments by American families or U.S. corporations is now under debate within the Obama administration, according to a U.S. official familiar with the conversations, who spoke on condition of anonymity because he was not authorized to discuss them by name.
The USA Patriot Act prohibits any payment or assistance to terror groups that could boost their support. The families of three Americans held by a rebel group in Colombia for five years, for example, were repeatedly advised against sending even medication and sneakers to the hostages to avoid potentially breaking the law.
But prosecution in those types of cases is rare.
"I never saw, in my time as an FBI agent, where the U.S. government threatened to prosecute a family for paying a ransom," said Clinton Van Zandt, the FBI's former chief hostage negotiator.
He said government-paid ransoms help create "a growing cottage industry in kidnap ransoms."
"You may get that person back that time, but what you've done is put a price tag on the head of every American overseas," he said. "And you've advertised that we pay to get Americans back."
European governments, in particular, cite more domestic pressure than felt in the U.S. to free kidnapped nationals, even by ransoms. Qatar, a small Persian Gulf country that often seeks a regional and international role as a mediator, also has interceded in paying or helping to arrange payment for Western governments, U.S. and British officials say.
In January, the U.S. and Britain secured a U.N. Security Council resolution appealing to governments not to pay ransom to terror groups. The Group of Eight, a bloc of some of the world's most developed economies, made the same pledge a year ago, also under U.S. and British pressure.
The Treasury Department has estimated at least $140 million worth of ransoms have been paid to al-Qaida and other terror groups in Africa and the Mideast since 2004.
France, the country most frequently accused of paying ransoms, has denied doing so, as have Germany, Italy, Denmark, Norway and Sweden. All are accused by security experts, diplomats and others of having paid or helped arrange ransoms.
Qatar typically refuses to comment on the issue of ransoms, and Spain has neither confirmed nor denied that it pays terrorists for hostages' release.
Despite its insistence that it does not make concessions to terrorists, the U.S. did just that earlier this year in securing the release of Army Sgt. Bowe Bergdahl from the Taliban, critics say. In exchange for Bergdahl, the Obama administration released Taliban prisoners from the U.S. detention center at Guantanamo Bay, Cuba, including some that critics called among the most hardened terrorists.
Rather than pay ransoms, the United States often tries to rescue its hostages with covert military teams trained to raid extremist camps. That was how the three hostages in Colombia were freed in 2008 in a joint operation with Colombian spies and U.S. intelligence.
And a secret operation was launched in early July to rescue Foley and other U.S. hostages being held by the Islamic State in Syria. U.S. special forces engaged in a firefight with the Islamic State, and killed several militants, but did not find any American hostages at the unspecified location.
At least three Americans are still being held in Syria. Two of them are believed to have been kidnapped by the Islamic State group. The third, freelance journalist Austin Tice, disappeared in Syria in August 2012 and is believed to be in the custody of Syrian government forces.
Knickmeyer reported from San Francisco. Associated Press writers Josh Lederman and Deb Riechmann in Washington, Michael Melia in Boston, Greg Keller in Paris and AP staff from around Europe contributed to this report.
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