Delegates at the Umno general assembly watched in pin drop silence as a short video clip of a beheading by Islamic State (IS) militants was aired.
The clip, lasting about a minute, was shown during the winding-up speech by Umno vice-president Datuk Seri Dr Ahmad Zahid Hamidi.
The video showed several men, believed to be IS militants, walking with their captives in a desert landscape.
Several people in the audience were heard gasping as the militants grabbed knives and placed them against the neck of the captives, who were made to kneel in front of them, before the clip abruptly ended.
Earlier, Dr Ahmad Zahid, who is also Home Minister, said he would be leading the committee to draw up new anti-terrorism laws against such a threat.
He also said that he did not mind being labelled a hardcore Malay or an Islamic fundamentalist - all in the name of race and religion.
Despite this, he said his respect towards other religions remained strong and he would never reject those of other races living under the Malaysian sun.
"It is all right if people perceive me as hardcore because that means I am hardcore for the Malays and if I am known as a fundamentalist, I am so in the name of religion."
Umno vice-president Datuk Seri Hishammuddin Hussein said the Bar Council was not the country's sole authority that had the right to speak on legal matters.
Hishammuddin, who is the party's legal bureau chairman, said its newly-formed unit called Bonafide Friends of Umno had engaged legal practitioners and found that many lawyers agreed with the party on issues such as the Sedition Act.
The Bar has been pressing for the repeal of the Act, calling it draconian.
"The right to speak on legal matters is not the exclusive right of the Bar Council. It is the right of all Malaysians," he said.
Datuk Seri Mohd Shafie Apdal said between June 2013 and September this year, the party registered 5,939 new voters, MCA (256), MIC (266) and Gerakan (373).
"However, this pales in comparison with that of Opposition parties with PAS registering 1,775 new voters, PKR (2,103) and DAP (9,309).
"The Umno president has ordered me to team up with all coalition components for a national movement to register new voters," he said.
Mohd Shafie highlighted a lack of coordination between religious institutions on Islamic affairs, especially on judgments made by the civil and syariah courts.
"There has to be a stricter enforcement, which would not allow any party to take advantage.
"For instance, the National Fatwa Council and state religious councils should work together," he said.
He referred to verses in the Quran, which called on Muslims to uphold their faith while at the same time respect other religions.