In the video, which was delivered to news agencies in Baghdad yesterday, Wood called on his government and on Washington and London to pull out their troops from Iraq.
"Family, friends, please help take the American troops, the Australian troops, the British troops out of here and let Iraq look after itself," Wood says in the two-minute video, which shows him held at gunpoint by masked men. "[Iraqis] are strong, they will...look after themselves against their neighbors. Please help me. I don't want to die."
Wood is reported to be a 63-year-old resident of California and married to an American. He is also reported to have worked in Iraq as a contract engineer for the past year.
The Australian government has said it will send an emergency negotiating team to seek the release of Wood -- the first confirmed Australian hostage to be taken in Iraq.
But Australian Prime Minister John Howard suggested in an interview on Australian radio today that pulling Australian troops from Iraq is not an option.
"We will continue to do all we can, consistent with our position of not giving in to hostage-takers," Howard said. "We can't alter that position and we won't alter that position. We can't have the foreign policy of this country dictated by terrorists, but we have got to do everything we can, nonetheless, to assist this poor man."
Many of the details surrounding Wood's abduction remain unclear, including when he was captured. It also is unclear whether Wood's captors -- whom he identified on the tape as "fiercely patriotic" -- are affiliated with Al-Qaeda.
The abduction comes as the Australian government is due to send an additional 450 troops to Iraq. They are to join some 880 Australian troops already protecting diplomats and assisting in Iraq's reconstruction.
Australian officials said in late February that the mission for the additional troops will be to protect Japanese engineers and train the Iraqi army following the withdrawal of Dutch troops from southern Iraq.
Tokyo has welcomed the deployment as maintaining security for its soldiers as they engage in humanitarian projects in the area. Japanese Foreign Ministry spokesman Hatsuhisa Takashima said the Japanese government "welcomes and values highly" the decision made by the Australian government to send its troops to Al-Muthana Province.
The hostage-takers' demands pit Wood's life against these commitments.
Wood is among some 200 foreigners who have been taken hostage in Iraq over the past year. Some 30 of them have been killed.
The latest hostage crisis comes amid an upsurge in insurgent violence over the past three days that has killed at least 110 people.
Militants in Iraq detonated three car bombs in the Iraqi capital today, killing at least eight people.