Iraqi government spokesman Laith Kuba said on Tuesday that Raja Nawaf Farhan al-Mahalawi was killed by rubble that fell when the house where he was held, became the scene of a fierce battle between US forces and foreign fighters on Sunday.
Kuba said al-Mahalawi had never been released, as his family thought, but had instead been handed from one kidnappers' cell to another.
The US military confirmed al-Mahalawi's death and that his family had identified his body on Tuesday in Qaim, an Iraqi city near the Syrian border, which was the scene of another major US offensive earlier this month.
Another military spokesman, Major Wes Hayes, said Sunday's battle started after foreign fighters fired rocket-propelled grenades and automatic weapons at coalition forces from a house.
Coalition troops returned fire and killed four foreign fighters inside the house - two Syrian fighters, an Algerian and a Jordanian - and wounded three others, two Saudis and a Moroccan, Hayes said.
"After questioning the wounded foreign fighters, coalition forces investigated the house and discovered [al-Mahalawi's] body, which had not been shot," Hayes said.
Confirmation of the death of Raja Nawaf Farhan al-Mahalawi, who was abducted on 10 May, ended a lingering mystery surrounding his whereabouts.