A State Department official on Tuesday said the bodies were found in a shallow grave near the site of the attack west of Baghdad.

"The remains of four unidentified individuals were found in Iraq today," Brenda Greenberg, a state department spokeswoman, said.

Families informed

Although the remains have not yet been positively identified, she said State Department officials had been in contact with the families of the seven American contractors who have been missing since Friday's attack.

A second department official said the families had been notified of the possibility of the remains being ones of their loved ones based on proximity of the grave to the location of the ambush.

The contractors were employed by Kellog, Brown and Root, a subsidiary of US energy giant, Halliburton.

Halliburton uncertain

Halliburton said it was not in a position to confirm that the remains belonged to its workers.

"While we are not yet certain of the identification of these brave individuals, and no matter who they are, we at Halliburton are saddened to learn of these deaths and are working with the authorities so the families can begin the grieving and healing process," the firm said in a statement.

US television networks reported the bodies were found near the intersection of Highways One and 10 on the road between Abu Gharib and Falluja, near the site of the ambush which also left one US soldier dead and 12 wounded.

One of the seven missing US contractors, Thomas Hamill, a 43-year-old truck driver, is known to have been taken hostage by Iraqi fighters. The fate of the other six missing civilians and two soldiers are not known.