US magazine Newsweek has issued a full retraction of its report that a Koran was flushed down a toilet at Guantanamo Bay by US interrogators.
The report has triggered anti-US rallies in the Muslim world
It said a US military investigation had failed to corroborate the story and apologised for carrying the report.
A White House spokesman said the retraction was a "good first step", but it could not repair all the damage.
At least 15 people were killed in anti-US riots in Afghanistan following the article's publication last week.
Violence broke out in several Afghan cities as angry mobs attacked the offices of the UN and international aid agencies.
As well as the deaths in Afghanistan, more than 100 people have been injured in violent protests across the Muslim world, from Pakistan to Indonesia.
'No longer sure'
In a one-sentence statement released on Monday evening, Newsweek editor Mark Whitaker said: "Based on what we know now, we are retracting our original story that an internal military investigation had uncovered Koran abuse at Guantanamo Bay."
Newsweek had originally apologised for publishing an uncorroborated report, but failed to issue a full retraction.
Mr Whitaker wrote that the magazine's original source is not sure where he saw the assertion.
"We regret that we got any part of our story wrong, and extend our sympathies to victims of the violence and to the US soldiers caught in its midst," he said.
The retraction followed criticism by US Defence Secretary Donald Rumsfeld and presidential spokesman Scott McClellan.
Mr McClellan said after Mr Whitaker's statement that "the report had real consequences".
"People have lost their lives. Our image abroad has been damaged," he said.
"There are some who are opposed to the United States and what we stand for who have sought to exploit this allegation."
The Pentagon has said there is no substance to the specific allegation.
But a spokesman for the US military in Afghanistan says there will still be a thorough investigation into the claims.
Several claims of desecration of the Koran have been made by former inmates of the US facility in Cuba.
Some 520 people remain incarcerated at Guantanamo Bay
"It is important that the Afghan people see that we take any allegations like this seriously," the spokesman, Col James Yonts, said.
In Pakistan, an alliance of six conservative Islamic parties rejected Newsweek's retraction.
Alliance leader, Qazi Hussain Ahmed, said it was "a crude attempt, both by the weekly magazine and the American authorities to defuse the anger of the Muslims across the world".
Insulting the Koran or the Prophet Muhammad is regarded as blasphemy and punishable by imprisonment or death in both Pakistan and Afghanistan.
The US is holding about 520 inmates at Guantanamo Bay, many of them al-Qaeda and Taleban suspects captured in Pakistan and Afghanistan following the 11 September 2001 attacks in the US and subsequent US-led invasion of Afghanistan.