A huge explosion levelled a chemical warehouse in central Baghdad on Monday after US troops, some of whom may have been members of a team hunting banned weapons, tried to break in.
Brigadier-General Mark Kimmitt said the troops raided a store "suspected of supplying chemical agents to terrorists, criminals and insurgents".
"There was also information that suggested these individuals were involved in the production of chemical munitions," he told a news conference.
Brig-Gen Kimmitt said the soldiers were accompanied by members of "some of our organisations", which he declined to name. Witnesses said they may have been members of the Iraq Survey Group (ISG), a team hunting banned weapons.
The reason for the blast was not immediately clear but witnesses said it happened when about 12 US soldiers tried to break into the building.
Residents showed a Reuters reporter two ISG identity cards and a document, marked secret and bearing the ISG logo.
It was attached to two aerial photographs of the building and the surrounding area and showed 32 Americans were involved in the operation.
The residents said the items were taken from the team's damaged vehicles.
The United States set up the ISG last year to look for weapons of mass destruction after the Iraq war and the toppling of Saddam Hussein. The suspected presence of banned weapons was the main reason Washington and London gave for going to war.
But the ISG's inability so far to find any WMD has cast a shadow over Western intelligence services and their governments' decision to invade Iraq.
After the blast, US soldiers fired into the air to disperse a crowd which gathered at the scene as firefighters doused the Americans' burning Humvees.
When the US troops left, Iraqis started trashing the charred vehicles, chanting anti-American slogans. Several displayed an American military helmet and rifle.