Major Josslyn Aberle, the spokeswoman for the 4th Infantry Division, on Friday said that the four were killed on Wednesday during clashes between occupation troops and Iraqi resistance fighters.
Those killed were relatives of resistance fighters the US soldiers were seeking to detain, she claimed. The circumstances of the deaths were being investigated, she added.
The admission of the civilian deaths reconfirms popular perception of occupation soldiers being trigger-happy.
Iraqi police officer Khalil Mahmud said US soldiers shot and killed four members of a local family - a husband and wife, one son and cousin.
The troops also injured a second son, aged 11.
US soldiers had cordoned off the nearby village of Dabi looking for a suspected resistance fighter.
Believing that the individual was hiding in a Bedouin tent, troops opened fire, killing the family members, Mahmud said.