Raid was connected to death of Simon Miller and four others
The Ministry of Defence has agreed to make payments to Iraqi people who were injured by British soldiers in a raid last month.
Despite earlier claims it had no evidence to support a tabloid newspaper's claims that 11 innocent Iraqis were "kicked and beaten" by SAS soldiers, the MoD confirmed the payment offer on Wednesday afternoon.
The department could not comment on whether a full investigation was taking place, calling it an "internal matter for the coalition forces".
The MoD said the money did not constitute compensation but would be in the form of "ex gratia payments to the individuals who were affected by the raid".
The injured will make individual claims for a payout, said a spokeswoman.
The assault allegations arose after 11 Iraqis were arrested and detained in al Majar al-Kabir as part of an operation to find the killers of six British Royal Military Police officers.
The soldiers died after they were besieged by a mob at the town's police station in June.
It was reported in the Mirror newspaper that the arresting soldiers kicked and beat the group, leaving one man unconscious. The paper said the 11 were later found to have been mistakenly identified as suspects.
An army spokesman told BBC News 24 the detainees suffered "minor injuries" such as cuts and bruises and that the British Army had agreed to pay them hundreds of dollars for what they went through.
He stressed the importance of maintaining good relations with the local people.
It was also reported that an army major - based in al Majar al-Kabir - had written an open letter of apology for the incident to the people of the town.
The MoD would be "looking into" gaining a copy of the letter, which had not been brought to their attention so far, said a spokesman.
He confirmed that "coalition troops conducted an arrest operation in al Majar al-Kabir and that a number of personnel were temporarily detained" on the day in question, August 23.
The MoD said it would never confirm SAS involvement in any operation.
A spokesman said the each of the detainees was given a medical examination after the arrests, before being taken to where they were "temporarily held for questioning".
"Certainly at this stage there were no signs of serious injuries," he said.