Nepal's diplomat to Qatar, Shyamanand Suman, said it was one of the "most noticeably awful days" in his nation's history.
The activists said the 12 Nepalis had been murdered in light of the fact that they "originated from their nation to battle the Muslims and to serve the Jews and the Christians".
The gathering, Army of Ansar al-Sunna, said the men were being rebuffed for helping the US, and it had "did the sentence of God" against them.
Mr Suman told Radio Nepal that he didn't yet know every one of the points of interest of the killings yet did trust the men were dead.
What sins have I resolved to merit this?
Jit Bahadur Khadka,
Father of killed prisoner
"I have reached Cairo and I have gotten affirmation. Affirmation has originated from distinctive quarters," he said.
No remaining parts of the prisoners have yet been recuperated.
Numerous outsiders have been caught in Iraq and some have been murdered, yet this is by a wide margin the biggest slaughtering of prisoners.
Among no less than 20 individuals as yet being held by aggressors are two French writers whose captors have given France until Tuesday night to repudiate a restriction on Islamic headscarves in state schools.
The 12 Nepalese nationals are thought to have headed out to the Middle East to procure cash as cooks and cleaners.
A relative offers water to Radha Khadka, the mother of Ramesh Khadka, a Nepalese prisoner murdered in Iraq
Ramesh Khadka's mom blacked out at the news of her child's demise
A video on a site utilized by Islamic aggressors indicated two men holding down a clear prisoner and decapitating him.
It additionally demonstrated a gathering of men lying on the ground who were then shot in the back and the head.
In Nepal, the administration held a crisis Cabinet meeting in the capital Kathmandu.
It denounced the killings as a "savage demonstration of terrorism", and squeezed the worldwide group to chase down the executioners.
Somewhere else, the men's families were melancholy stricken.
"What sins have I resolved to merit this?" Jit Bahadur Khadka, father of prisoner Ramesh, was cited as saying by the Associated Press news office in Kathmandu.
His wife Radha swooned at the news.
Villagers swarmed round the family home in Lele, 20km (12 miles) south of Kathmandu, where the 19-year-old prisoner had lived, to comfort them.
"We were expecting their protected return. This is extremely stunning. This is totally surprising," said Sudarshan Khadka, Ramesh's sibling.
He said the Nepalese government had not done what's necessary to get the men discharged.
In any case, Nepal said it had attempted to reach the prisoner takers.
Outside Minister Prakash Sharan Mahat said the killings came as a stun on the grounds that "there were no requests or due dates."