The report published in the Lancet, a medical journal, said on Wednesday: "We estimate that as of July 2006, there have been 654,965... excess Iraqi deaths as a consequence of the war, which corresponds to 2.5% of the population in the study area.
"Of post-invasion deaths 601,027 ... were due to violence, the most common cause being gunfire."
The report, by a team led by Gilbert Burnham of Johns Hopkins Bloomberg School of Public Health in Baltimore, Maryland, was later dismissed by George Bush, the US president, who said he did not consider it "credible".
The Iraqi government also condemned the figures as "exaggerated", with Ali Debbagh, an Iraqi government spokesman, saying the figure "flies in the face of the most obvious truths".
The report estimated deaths in the post-invasion period from March 2003 to June 2006, and compared the mortality before the invasion, from January 2002 to January 2003.
They randomly selected 47 sites across Iraq, comprising 1,849 households and 12,801 people.
"Gunfire remains the most common cause of death [in Iraq], although deaths from car bombing have increased"
Interviewers asked householders about births, deaths and migration and if there had been a death since January 2002 and, if so, asked to see a death certificate to note the cause.
Of the 629 deaths recorded, 547, or 87%, were in the post-invasion period.
This sample was used to extrapolate that, across the country, 654,965 deaths - amounting to 2.5 per cent of the population - have occurred since March 2003.
About 601,000 of the deaths were due to violence, of which about half were due to gunfire. The study also estimated that 31% of deaths were as a result of action by the US-led forces.
"The number of people dying in Iraq has continued to escalate," the report concluded.
"The proportion of deaths ascribed to coalition forces has diminished in 2006, although the actual numbers have increased every year.
"Gunfire remains the most common cause of death, although death from car bombing have increased."
'Out of control'
The Lancet's new study follows a previous October 2004 study which said that 100,000 deaths had occurred in the country between March 2003 and September 2004 as a result of violence, heart attacks and aggravated health problems.
It also comes as Jan Egeland, the United Nations undersecretary for humanitarian affairs, said that revenge killings in Iraq were "totally out of control".
Egeland said that a "very worrying" deterioration in conditions had led to more than 315,000 Iraqi civilians being displaced, while women were increasingly being attacked in so-called "honour" killings.
However, some attacked the timing of the new report's release as political, coming only three weeks before the US midterm elections.
"They're almost certainly way too high," said Anthony Cordesman of the Centre for Strategic and International Studies in Washington, of the figures.
"This is not analysis, this is politics."