A senior US military officer in Iraq has said that a battalion of the new Iraqi army refused to support US forces in the town of Falluja.
US officers say there are risks in training a new army so quickly
The 620-man battalion, which graduated from training camp on 6 January, refused to go to Falluja after being shot at in a Shia area of Baghdad.
It was the first time US commanders had sought to involve post-war Iraqi forces in major combat operations.
The troops were quoted as saying they had not signed up to fight Iraqis.
Lieutenant General Ricardo Sanchez, who heads the US-led ground forces, said the incident had uncovered significant challenges within the new force, being trained ahead of the June handover of sovereignty.
Analysts say the incident has exposed serious weaknesses, casting further doubt on US plans to transfer security matters to Iraqis.
BBC regional analyst Sadeq Saba says the refusal of Iraqi soldiers to fight in Falluja also shows that they fear for their lives.
He says Iraqi security officers themselves have been a major target for the armed fighters in the country and many of them have been killed.
A report in the Washington Post quoted Major General Paul Eaton, who is overseeing the development of the new army, as saying that the situation was "a command failure". He refused to characterise it as a mutiny.
"The lines are blurring for a lot of Iraqis right now, and we're having problems with a lot of security functions," he said.
The troops were supposed to be given secondary tasks such as manning checkpoints and securing the perimeter, but had apparently not been told this.
"The battalion thought it was going to be thrown into a firestorm in Falluja," he said.
Lieutenant General Sanchez said there had clearly been risks in trying to set up reliable security forces quickly.
"The requirement for us to hand over security to the Iraqi people will depend upon our ability to quickly stand up their security forces...," he said. "And that's going to take us some time."
The battalion is one of four in the new army.