US forces shot dead two Iraqi civilians south of Baghdad on Saturday following a bomb attack on their convoy, Iraq security officials said, while the US military denied its soldiers opened fire.

"A roadside bomb hit a US convoy in Yusifiyah on the road to Hilla," an interior ministry official said. "American forces opened fire randomly, killing two civilians and wounding five."

A police lieutenant in Yusifiyah, 25 kilometres (15 miles) south of Baghdad, confirmed the incident, which he said took place about 7:00 pm (1600 GMT), but put the toll at two dead and three wounded, one of them seriously.

Both spoke on condition of anonymity.

However, Colonel Barry Johnson, a spokesman for United States Forces - Iraq, said that US troops did not open fire, and that no injuries were reported.

"We have an operational report of an incident in that general area resulting from an IED (roadside bomb) attack against a convoy, (but) no shots were fired in response to the attack against our forces and there are no reported injuries," Johnson said.

The Thursday incident is the first reported killing of Iraqi civilians by US forces since US President Barack Obama announced on October 21 that American troops will depart Iraq by the end of 2011.

It could potentially lead to increased animosity against American forces, complicating US withdrawal efforts.

Two US soldiers have been killed in attacks since the withdrawal announcement. A total of 4,484 US soldiers who have died in Iraq since the 2003 invasion, according to an AFP tally based on data compiled by icasualties.org.

The Iraq war has stretched on for almost nine years, left tens of thousands of Iraqis dead, and cost hundreds of billions of dollars.