The Los Angeles Times on Thursday quoted the two US staff sergeants as claiming they shot and killed the Iraqi boy in a "mercy killing" as he lay moaning on the ground in an August incident in the Baghdad slum of Sadr City.
The two soldiers told US officials that they killed the teenager in order to "put him out of his misery," the newspaper said.
But Iraqi witnesses, including a relative of the dead boy who had pleaded for US troops to help him, were enraged by the killing, which seemed certain to reignite a debate about the conduct of US troops in Iraq in the wake of the Abu Ghraib prisoner torture scandal.
The boy was shot as US medics rushed to treat a half dozen or so of those wounded when US troops opened fire on a garbage truck after mistakenly concluding that it was planting roadside bombs, the newspaper said, quoting Iraqi witnesses and US military officials.
The truck exploded into flames and about seven Iraqis were killed in the 18 August incident, including the boy shot on the ground, the newspaper said.
The US army has been scrutinised
since the Abu Ghraib scandal
Staff Sergeant Cardenas Alban, 29, of Carson, California, and Staff Sergeant Johnny Horne, 30, of Winston-Salem, North Carolina both of the army's 1st Battalion, 41st Infantry Regiment, face military court proceedings in Baghdad to determine if there is enough evidence for court martial, the Los Angeles Times reported.
If convicted, they could receive the death penalty. US military officials told the newspaper they could not identify the dead Iraqi boy because they did not collect information at the scene and had lost track of his body.
Citing Iraqi witnesses, the Los Angeles Times identified the victim as Qasim Hasan, 16, who had been working the night shift on the rubbish truck with his brother and several cousins.
None of those named in the newspaper's report or their representatives could be immediately reached for comment.