South Korea will deploy 3,000 more troops to Iraq despite the beheading by Muslim militants of a South Korean hostage.
However, all South Korean civilians, other than essential personnel, will be evacuated from the country.
The decisions follow the beheading of a South Korean businessman abducted and held hostage by militants.
Some 65 South Korean nationals and about 22 South Korean firms were operating in Iraq at the time of the kidnapping last Thursday.
Foreign Ministry spokesman Shin Bong-kil told reporters in Seoul this evening that the US military had found 33-year-old Kim Sun-il's body.
Earlier, Arabic television station Al Jazeera reported that the group which had kidnapped Kim Sun-il on 17 June had carried out its threat to behead him.
A negotiator was earlier reported to have met with members of an Islamic militant group who took him hostage.
The chief of a South Korean security company was quoted as saying the negotiator had urged the kidnappers to allow more time for talks.
The Dubai-based television network Al-Arabiya had reported that the deadline for Kim's beheading had been extended.
