The US ambassador to Libya and three other embassy staff have been killed in a rocket attack in the eastern city of Benghazi, the White House has confirmed.
It was not clear if ambassador Christopher Stevens was in his car or the Libyan consulate when the attack occurred overnight on Tuesday. President Obama has strongly condemned the attacks as "outrageous" and offered his condolences to the families of the people killed.
One of the other three Americans killed was identified as Foreign Service Information Management Officer Sean Smith, the White House confirmed.
A tweet from the account of the deputy prime minister of Libya, described the attacks as "cowardly".
The Libyan official told Reuters Mr Stevens had been trying to make his way to safety after protesters tried to storm the consulate in Benghazi and opened fire, killing a staff member, in protest at YouTube films that they deemed blasphemous to the Prophet Muhammad.
Mr Stevens, a veteran of Middle East and North African politics, was previously the US envoy to Libya's rebel forces during the uprising.
Obama offered a personal tribute to the ambassador, saying that Mr Steven's legacy will live on.
"Chris was a courageous and exemplary representative of the United States," the president said.
"Throughout the Libyan revolution, he selflessly served our country and the Libyan people at our mission in Benghazi.
"As ambassador in Tripoli, he has supported Libya's transition to democracy. His legacy will endure wherever human beings reach for liberty and justice. "
Violence broke out in Benghazi and the Egyptian capital Cairo in protest at an American amateur film, allegedly produced by Coptic Christians now living in the United States, that showed Muhammad standing trial.
There are conflicting reports about which film sparked the anger of the protesters.
One, entitled Muhammad's Trial, the film, which was widely circulated on YouTube, depicts a mock trial of the prophet, and is reportedly linked to controversial Florida pastor Terry Jones, who gained notoriety in the US and throughout the Muslim world for threatening to burn a Koran.
The pastor was also behind “International Judge Muhammad Day”, an online show trial symbolically held on 11 September, in which the Prophet was to "stand trial" before an international audience.
Another film, Innocence of Muslims, posted on YouTube, was also cited as the cause of the violence.
Its director, who lives in southern California but told AP he was an Israeli Jew, said he had gone into hiding.
Afghanistan's president, Hamid Karzai, has condemned the films, saying "Insulting Islamic values is not part of the freedom of speech," reported one Reuters correspondent.
Writer and director Sam Bacile, who said he was a real estate developer, made the two-hour movie because he believes: "Islam is a cancer, period."
The film depicts child abuse and philandering by the Prophet Muhammad. It took Bacile three months to make his film, with 59 actors and about 45 people behind the camera.
The director said it has been shown only once, to a mostly empty cinema in Hollywood earlier this year.
"Some have sought to justify this vicious behaviour as a response to inflammatory material posted on the Internet," said Secretary of State Hilary Clinton.
"The United States deplores any intentional effort to denigrate the religious beliefs of others.
"Our commitment to religious tolerance goes back to the very beginning of our nation. But let me be clear: There is never any justification for violent acts of this kind.
"We are heartbroken by this terrible loss."
The last time an American ambassador was killed by terrorists was in 1979.
US Ambassador to Afghanistan Adolph Dubs was killed after he was kidnapped and an attempt to rescue him went awry, according to CNN.
Foreign Secretary William Hague condemned the attack: "There is no justification for such an attack and the appalling death of an US official.
"My thoughts and condolences are with his family and all his colleagues at the State Department.
"It is essential that the Libyan authorities take urgent action to improve security, particularly in Benghazi, and identify those responsible for such attacks.
"The UK stands ready to assist the Libyan authorities in any way we can and to support their efforts to continue the path towards a stable and secure Libya that fulfils the aspirations of the Libyan people."
Human Rights Watch said in a statement Mr Stevens' murder should act as a "wake-up call to the Libyan government on the need to rein in armed groups that have been defying the law in Libya."