Malaysia will bar companies from hosting Internet sites such as the one that carried a video of the beheading of American Nicholas Berg, Prime Minister Abdullah Ahmad Badawi said on Friday.
Acme Commerce Sdn Bhd, the Malaysian firm hosting the Muntada al-Ansar Islamist Web site that originally showed the killing, pulled the site on Thursday.
"We will not allow any kind of web page or any company operating on behalf of any terrorist organization, we won't allow certainly," Abdullah told reporters.
A CIA official has said al-Qaida supporter Abu Musab al-Zarqawi was probably the one who beheaded Berg on the video shown this week, confirming claims made on the film.
The video aired on Tuesday showed five masked men standing behind Berg. One of them read a statement urging Muslims to seek revenge for Iraqi prisoners abused by U.S. soldiers at Abu Ghraib prison near Baghdad.
The masked men then pushed Berg to the floor and one of them sawed off the American's head with a large knife and held the head up for the camera.
U.S. officials say Zarqawi and his supporters have contributed to the insurgency in Iraq and are believed responsible for some of the bombings. U.S. forces have been hunting for him and believe he is in Iraq.
Mainly Muslim Malaysia, current chairman of the 57-member Organisation of Islamic Conference, opposed the U.S.-led invasion of Iraq last year and supports a central role for the United Nations in resolving the conflict.
But it has close security ties with the United States, its major trading partner, and has jailed dozens of alleged Muslim militants itself in arrests which began before the September 11, 2001 attacks on U.S. cities.