(CBS) Enemies of the United States are spreading on the Internet a gruesome piece of propaganda. It is a videotape of Wall Street Journal reporter Daniel Pearl, who was kidnapped and murdered earlier this year in Pakistan. And it is being used by terrorists to recruit new soldiers for the cause.

The tape is titled "The Slaughter of the Spy-Journalist, the Jew Daniel Pearl," and it as disturbing a piece of propaganda as you will ever see, reports CBS News National Security Correspondent David Martin.

Interspersed with news clips, the video of Pearl's final hours is a cold-blooded recruiting poster for America's enemies, complete with Arabic subtitles.

"The translation is in Arabic because the audience is Arabic," says Ali al-Ahmed, a dissident Saudi Arabian journalist, who found it on the Web a few days ago.

"The audience for this Web site are young Saudis, college students, high school students and unemployed Saudis," he says.

The U.S. government asked the Web site to remove the video, but it has since shown up on at least one other site.

What is perhaps most shocking is that some viewers do not find it repulsive.

"The first place where they had it on most of the people who commented on the tape, they said, 'I wish I was there. I wish I had done it,'" says al-Ahmed.

The U.S. may be winning the war in Afghanistan, but it is losing the propaganda war in parts of the Arab world.

As al-Ahmed sees it, "the United States is out of the game in the PR war in Saudi Arabia. They are disconnected from young Saudis. Young Saudis have nowhere to turn if they want to hear the United States' message."

With the background blacked out to cover up anything that might reveal the location, the tape begins with Pearl giving a brief factually correct description of his roots.

"My father's Jewish. My mother's Jewish. I'm Jewish," says Pearl.

And that seems to be the real reason Pearl was murdered, not because he was a spy but because he was a Jew and an American.

In a production style similar to the most recent video of Osama bin Laden, Pearl's statements are inter-cut with news clips showing scenes of Israel's war against the Palestinians. His jerky movements are a telltale sign some of his statements have been edited for maximum effect. He is under duress and at times appears to be reciting anti-American lines given to him by his captors, no doubt hoping that saying the right thing might save his life.

"We Americans cannot continue to bear the consequences of our government actions such as the unconditional support given to the state of Israel," Pearl says.

The tape ends with Pearl's beheading which no one needs to watch. But everyone needs to understand that this tape is a testament to the depth of the hatred against the United States, not just among terrorists but throughout much of the Arab world.

This tape is a weapon.