Major-General William Caldwell said on Tuesday: "The bodies were found last night in the vicinity of Yusufiya. Coalition forces have recovered what we believe are the remains of the soldiers."

Earlier in the day, an Iraqi official had said the bodies were discovered on a street near the town where they went missing and had been tortured.

Major General Abdul Aziz Mohammed said: "The two soldiers were found yesterday by a combined US-Iraqi force. We found they had been tortured in a barbaric fashion."

In an internet statement posted on Tuesday, Al-Qaeda in Iraq said it had killed the two soldiers by slitting their throats. The claim could not be independently verified.

Privates first class Kristian Menchaca and Thomas Lowell Tucker had been manning checkpoints when they were attacked on Friday. Another soldier with them was killed.

An umbrella group that includes al-Qaeda in Iraq claimed on Monday it had kidnapped the two soldiers, but it did not name them and the US military was sceptical of the claim.