Secretary of State Colin Powell Wednesday said there will be no change in the United States' refusal to deal with terrorist demands in the wake of the decapitation slaying of two American kidnap victims in Iraq this week.

There had been media reports that Iraq's interim government might be considering the release of at least one of two women security prisoners whose release had been demanded by the kidnappers of the two slain Americans.

But that has since been denied by both Iraqi and U.S. officials in Baghdad. And at a United Nations news conference, Secretary Powell said there would be no change in U.S. policy despite the brutal circumstances of the two Americans' murder.

"If there's one thing we've learned over time is that you can't negotiate with these kinds of terrorists," he said. "You can't give in to them. Because all it does is incentivize them to do it again. And therefore our policy will remain unchanged."

Mr. Powell expressed deep regret at the death of the two American contractors who he said had gone to Iraq to help that country's people, and said his heart goes out to their families, especially given the manner of their deaths.