Militant leader Abu Musab al-Zarqawi was still alive when Iraqi police got to the scene of the air strikes that targeted him, the US military says.
Pictures of Zarqawi's body were earlier put on display by the US
But the leader of al-Qaeda in Iraq died of his wounds shortly afterwards, Major General William Caldwell said.
US planes dropped two 500lb (230kg) bombs on Zarqawi's safe house near the city of Baquba on Wednesday.
After US troops arrived, Zarqawi tried to move off the stretcher where he had been placed, Gen Caldwell said.
"Everybody re-secured him back onto the stretcher, but he died almost immediately thereafter from the wounds he had received from this air strike," he said.
US military officials had earlier said Zarqawi had not survived the strike, which they said came after tip-offs from his organisation.
On Friday vehicles were banned for hours from the streets of the capital and nearby Baquba, amid fears of bomb reprisals for the death.
Thousands of worshippers go to mosques for Friday prayers and have often been targeted by bombers linked to Zarqawi.
In fresh comments on the death, President George W Bush said it was a "major blow" to al-Qaeda, but it was not going to end the war.
"It's certainly not going to end the violence, but it's going to help a lot," Mr Bush said.
News of Zarqawi's death has given a massive boost to the Iraqi government and the Bush administration, correspondents say.
The Iraqi prime minister has promised to build on the momentum gained from the death to deliver security.
Nouri Maliki said he wanted to launch a drive to "secure" Baghdad and confront "ethnic cleansing" around the city, in an article in the UK's Times newspaper.
Giving the first details of the discovery of Zarqawi alive, Gen Caldwell told reporters the militant leader had "mumbled something indistinguishable and... very short" before he died.
When US troops got there, they had made an identification of Zarqawi by distinguishing marks on his body and "some kind of visual, facial recognition", he said.
"We do not know" why he had survived the initial strike, he said.
19 Aug 2003: Bombing of UN office in Baghdad, 23 dead
29 Aug 2003: Bombing of Najaf shrine killing Shia cleric Muhammad Baqr Hakim, 85 dead
2 March 2004: Co-ordinated attack on Shia mosques during Ashoura ceremony, 181 dead
11 May 2004: Nick Berg beheaded, first of at least nine foreign hostages killed in 2004
14 Sept 2004: Car bomb targeting police recruits in Baghdad, 47 dead
19 Dec 2004: Car bombs in Najaf and Karbala, 60 dead
9 Nov 2005: Triple attack on hotels in Amman, 60 dead
There was nothing in the report to indicate Zarqawi had been shot, Gen Caldwell said.
He said some "analysis of his body" had been done and DNA results were expected in coming days.
Zarqawi was one of six people killed in the raid, including two other men and three women, he added - contrasting with earlier statements that a child had died.
The US military says the operation against Zarqawi has given them a "treasure trove" of new information.
The militant leader was known for his particularly gruesome tactics, including videotaped beheadings of hostages and synchronised bomb attacks on civilians.
Unrest has continued in Iraq with several attacks targeting workers and installations used by the oil industry:
- A senior official from Iraq's state oil company is kidnapped near his home in Baghdad
- Three oil engineers are reportedly shot dead on the road from Baiji to the oil production centre of Kirkuk
- Gunmen in Kirkuk attack an oil pipeline, reportedly killing one civilian and injuring three soldiers
On the streets of Baghdad, most people welcomed the news of Zarqawi's death.
"We consider this a great delight to the people because right must prevail," said one man. "Thanks are due to God for ending our ordeal."
But a statement on an Islamist website, purportedly from al-Qaeda, said: "The death of our leaders ... only makes us more determined to continue the jihad."
US Defence Secretary Donald Rumsfeld has dismissed as "utter nonsense" fears that Zarqawi's death will lead directly to more violence.
"These things tend to get planned well in advance," he said.
Jordanian intelligence reportedly assisted the US-led operation
Zarqawi traced to isolated safe house in the village of Hibhib approximately 10km outside Baquba, north-east of Baghdad
US aircraft launched air strike at about 1815 on Wednesday. Two F-16 aircraft dropped two 500lb bombs. The militant leader was reportedly holding a meeting with associates, including spiritual adviser Sheikh Abd-al-Rahman
Several others were reportedly killed
Iraqi police were first on the scene, followed by troops from the Multi-National Division North
Zarqawi identified by fingerprints, facial recognition and known scars