The relatives of a Christian priest who was kidnapped and beheaded in Iraq have said that his Muslim captors had demanded his church condemn the pope's recent comments about Islam and pay a US$350,000 ransom.

They were speaking as more than 500 people attended a memorial service on Thursday for father Amer Iskender after his decapitated body was found in an industrial area of the northern city of Mosul on Wednesday.

Iskender was a priest at the St. Ephrem Orthodox church in Mosul.

"He was a good man and we all shed tears for him ... He was a man of peace," said Eman Saaur, a 45-year-old schoolteacher who said she attended Iskender's church regularly.

Pope apology demanded

Iskender's relatives, speaking on condition of anonymity for fear of reprisal, said the unidentified group that seized Iskender on Sunday had demanded a ransom and that his church condemn a statement made by Pope Benedict XVI last month.

Before Iskender was kidnapped, his relatives said, the church already had put up signs condemning the statement and calling for good relations between Christians and Muslims.

The message was posted again, they said, after the priest's kidnappers made their demand.

"It was a tragedy," said Hazim Shaaiya, 60, who had come to the memorial service to pay respects.

"Father Amer Iskender was a peaceful, kind religious man."

In a speech at a German university Pope Benedict had quoted a medieval Greek emperor saying that some Muslim teachings were "evil and inhuman" and that Islam was a violent religion spread by the sword.

Muslims worldwide staged violent protests in response.

In the West Bank several churches were attacked and in Somalia a Catholic nun was shot dead.

Christians flee Iraq

The news of the priest's murder came as the leader of an Iraqi Christian group said that more than 35,000 Iraqi Christians have fled to Syria to escape the violence in their country.

Christians are leaving because of individual threats from Muslim extremists and the general deterioration of security in Iraq, Emmanuel Khoshaba, the Syrian Orthodox head of the Assyrian and Democratic Movement, said on Thursday.

Christians are frequently attacked by Muslims in Iraq.

Islamic groups have carried out several car bomb attacks on churches and Christian areas.

Christian women have also been kidnapped in large numbers, and on other occasions been killed for not following Islamic social and dress codes.

Khoshaba's figure indicates an increase of 75 per cent from the 20,000 Iraqi Christians who were said to have moved to Syria in 2004, the year after US-led forces invaded Iraq and began the conflict.

Christians made up around three per cent of Iraq's pre-war population 26 million people.

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