US and Iraqi forces have issued video footage which they say shows children under the age of 11 being armed and trained by al-Qaeda.
The US military said five tapes had been found when coalition forces raided suspected al-Qaeda hideouts north of Baghdad in December.
The videos showed boys brandishing guns and grenades during training exercises.
The Americans hope the images might persuade Iraqis to turn against the Islamic militants, correspondents say.
The footage compiled from the tapes features around 20 young boys running around with pistols, machine guns and rocket-propelled grenades.
In one scene, the boys take part in a mock kidnapping, where they force the volunteer to kneel in the dust with a pistol at his head.
The BBC's Jim Muir in Baghdad says the children are also shown posing in sinister black facemasks to announce the slaughter of their hostages.
The US military believes the footage was shot as raw material for propaganda films aimed at attracting new, young recruits.
US military spokesman Rear Admiral Gregory Smith said it did not appear that the boys had been kidnapped or press-ganged into taking part.
"Clearly there are families in which the adult males are part of al-Qaeda and you would assume that those children are growing up in that environment that would, unfortunately, produce the next generation of al-Qaeda," he said.
Iraqi defence ministry spokesman Mohammed al-Askari said the tapes were a "sign of desperation" by al-Qaeda and claimed that children were trained to kidnap to raise funds from ransoms.