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An Islamic State affiliate in Egypt has released a video threatening to kill a Croatian hostage if authorities do not release "Muslim women" held in prison within 48 hours, as the country plans to unveil a highly promoted new extension of the Suez Canal.

The video, circulated on social media on Wednesday, shows a man wearing a yellow jumpsuit kneeling in the desert before a knife-wielding masked man in military fatigues.

A black Islamic flag often used by the extremists flutters next to him. The video identifies itself as coming from the media arm of the Islamic State affiliate in Egypt's lawless Sinai Peninsula.

Reading calmly from a note in English, the man identifies himself as Tomislav Salopek, a married, 30-year-old father of two, adding that Islamic State fighters captured him on July 22.

If Egyptian authorities do not act, he said, "the soldiers from Wilayet Sina will kill me."

Wilayet Sina is the Arabic phrase for the Egyptian group calling itself the Sinai Province of the Islamic State.

It was not clear where it was shot, but the video entitled "A Message to the Egyptian Government," was in the style of previous Islamic State propaganda videos in which they threaten and behead hostages.

The Egyptian government had no immediate comment on the video.

The reference to "Muslim women" apparently referred to Islamists who have been arrested in a broad government crackdown on dissent.

Egypt, a majority Muslim country, now holds thousands of Islamists and suspected supporters of the outlawed Muslim Brotherhood group in prison following the 2013 military overthrow of Islamist President Mohammed Morsi.

Croatia's Foreign Ministry late last month said that one of its nationals with the same initials had been kidnapped in Cairo on July 22 while on the way to work.

The company, which Salopek identified as France's CGG Ardiseis, works in the oil and gas sector and has a branch office in Cairo's leafy suburb of Maadi, where many expats and diplomats live.

Calls to CGG Ardiseis' office in Cairo were not immediately answered.

Croatian state television read out a statement on air Wednesday night saying the government was "doing all it can to promptly resolve the difficult situation," without elaborating.

Croatian authorities could not be immediately reached and its embassy in Cairo was closed on Wednesday, which is a public holiday in Croatia celebrating its independence in the Balkan wars of the 1990s.

An Egyptian security official said last month that Salopek is a petroleum engineer who was abducted by gunmen while driving on a highway west of Cairo.

His car, its driver and the man's belongings were left behind, said the official, who spoke on condition of anonymity as he was not authorised to speak to journalists. He had said that a police investigation was underway.

Egypt has seen an increase in violence since Morsi's ouster, with attacks by suspected Islamic extremists in both the Sinai Peninsula and the mainland focusing primarily on security forces.