A local Kurdish leader who put the death toll at eight expressed anger over the attack but US headquarters insisted its forces had "exercised proper self-defence measures in response to the assessed threat".

"Coalition forces killed five armed men during a raid in Mosul on Friday morning targeting an Al-Qaeda in Iraq network in the Al-Karama neighbourhood," the US military said, referring to the Arab Sunni-led insurgent group.

The statement said US soldiers had spotted armed men in a bunker near a suspected Al-Qaeda bomb factory and had "made several calls in Arabic and Kurdish for the men to put down their weapons and fired warning shots."

Helicopters were called in and opened fire.

"At the same time, ground forces began receiving small arms from the same bunker," the statement said, without making it clear who had fired first.

The US forces turned the five bodies over to local police officials along with nine men detained in the operation. "The armed men were later identified as Kurdish police," the statement added.

"Coalition forces express deepest sympathies to the families of those individuals killed," the statement said.

The head of the Mosul office of the Patriotic Union of Kurdistan (PUK), the party run by Iraq's President Jalal Talabani, said that eight rather than five police had been killed.

"There was a mistake on the part of the American forces," Ribaz Derkoti told AFP in the unruly northern city. "We gave information on the location of our units to the Americans long ago."

"At 10:30 this morning clashes took place between a terror group and one of our units in the region, following these clashes US helicopters bombed our units," he complained.