MIAMI, (AFP) - Murdered American journalist Steven Sotloff urged his friends and family to live life "to the fullest," in a letter penned during his captivity in Iraq and read Friday at a memorial service in his honor.

Hundreds of mourners paid their last respects to the journalist at a somber and emotional ceremony held just days after his beheading by Islamic State militants.

"Please know I'm OK. Live your life to the fullest and fight to be happy," the reporter said in a letter read to the congregation at the service.

Parts of letters written by Sotloff were smuggled out to his family during his captivity, US news reports said.

Flags flew at half-staff across his home state of Florida on Friday, and a large meeting room at a Miami synagogue, said to hold up to 700 people, was filled beyond capacity.

Sotloff, 31, was beheaded by Islamic State militants in a video released Tuesday, two weeks after the similar video of US journalist James Foley's killing was posted online.

The freelance reporter, who had written for various publications, including Time magazine, Foreign Policy and others, was kidnapped April 4, 2013 in Aleppo near the Turkish border.

His family remembered him in tributes as a thoughtful man who enjoyed simple pleasures and was fascinated by the Middle East.

Above all else, his parents said, he was an adored son whose death has left them shattered.

"I miss him very much. I have lost my son and my best friend, but I know his passing will change the world," said his grieving father Arthur Sotloff.

"I want to speak from my heart, but my heart is broken." His mother Shirley said hat her son's "happiest moments were on a football or a rugby field," she recalled during the two-hour service.

"He will always be in my heart and in my memories."