BAGHDAD - Militants holding five Britons in Iraq threatened in a video on Tuesday to kill one of them in 10 days as a "first warning" unless Britain withdrew its troops.

Violence in Iraq has fallen to its lowest level in nearly two years and U.S. President George W. Bush said his "surge" strategy of sending 30,000 additional troops was working.

The U.S. military said 40 senior al Qaeda figures had been killed or captured in November but the appearance of a British hostage in a video aired on Arabic-language al Arabiya channel underscored the continuing threat of violence.

The hostage was one of five Britons -- a computer instructor and his four bodyguards -- seized by gunmen from inside a Finance Ministry building in Baghdad in May.

The video, dated November 18, set a deadline of 10 days from the date it was broadcast for Britain to pull its troops from Iraq. British troops are deployed in the mainly Shi'ite south.

"My name is Jason. Today is November 18. I have been here now 173 days and I feel we've been forgotten," said one of the hostages on the video as he sat in front of a banner of the Shi'ite Islamic Resistance in Iraq.

The video showed a statement in which the group threatened that "this hostage will be killed as a first warning, which would be followed with details that you would not wish to know".

Britain condemned the video. A Foreign Office spokesman said: "No matter what the cause, hostage-taking can never be justified. We again call on those holding the men to release them unconditionally."

DECLINE IN VIOLENCE

Washington says the decline in violence in Iraq shows its strategy of sending extra troops and moving them from big bases into Iraqi neighbourhoods has been a success.

The fall in violence has also influenced debate in Washington where leading Democrats opposed the "surge" and the Democrat-controlled congress tried this year to set a timeframe for troops to be withdrawn as a condition of funding the war.

At a news conference, Bush called on Congress to pass his latest war funding measure without demanding a withdrawal date.

"You know, arbitrary dates for withdrawal are unacceptable, particularly given the fact that the strategy is working.

"It's working. And it seems like to me that this Congress ought to be congratulating our military commanders and our troops. And one way to send a congratulatory message is to give them the funds they need," he said.

Although down, violence has not stopped. A suicide bomber blew himself up outside a police station in the Diyala river valley town of Jalawla, north of Baghdad, killing six people.

U.S. commanders say one reason for the reduction in violence has been a series of operations aimed at Sunni Arab al Qaeda militants, blamed for trying to trigger all-out sectarian war through a campaign of car bombings and other attacks.

U.S. military spokesman Major-General Kevin Bergner said nine senior al Qaeda members were killed and 31 caught last month. One of those killed was Syrian Abu Maysara, who Bergner described as a top adviser to al Qaeda in Iraq leader Abu Ayyub al-Masri and his slain predecessor Abu Musab al-Zarqawi.

Also on Tuesday, Iraq's cabinet agreed to seek a final one-year extension on the U.N. Security Council mandate allowing U.S.-led foreign troops to operate in Iraq. The current one-year mandate expires at the end of 2007.

The ebb in violence has led some of the 2 million refugees who fled to neighbouring countries and a similar number of people displaced within Iraq to begin returning to their homes.

The United Nations has said Iraq is not yet safe enough for a full-scale return and extra resources need to be mobilised to cope with those coming home.

"There's a need for immediate action to ensure those who come back voluntarily keep their dignity," U.N. mission chief in Baghdad Steffan de Mistura told a news conference.