A US military source said on Friday that they informed Iraqi police and handed over the bodies. The source said both deaths appear to be civil murder cases.

However, the brother of the girls had earlier said that US troops at Ibn Firnas airport, 7km (4 miles) from Baquba, shot Fatima and Azra, 15 and 12, on Thursday at midday as they were collecting wood from a field some 30m away.

"Azra died on the spot and my other sister later died from her wounds," said 18-year-old Qusay.

Policeman Hussein Ali said US forces handed one of the girls' bodies over to the police "arguing that she had a gun in her possession."

Police searched the girls' home, "without finding anything illegal," Ali added.

Baghdad march

Meanwhile in Baghdad, police closed off the capital's main commercial thoroughfare on Friday for hundreds of Iraqis demonstrating against terrorism amid persistent fears of attack by anti-US or Islamist fighters.

There was a brief flurry of panic at the front of the march as it passed the Palestine - Baghdad's best-known media hotel - and police halted the demonstrators because of a suspect car.

A search of the vehicle turned up no explosives and the rally was able to continue on its way. 

A heavy Iraqi police presence accompanied the marchers while two US military helicopters hovered overhead.