Photographs of the alleged abuse of Iraqi civilians by UK soldiers must not be allowed to "tarnish the good name of our armed forces", Tony Blair has said.
The court was shown 22 photos depicting alleged abuse
The pictures were "shocking and appalling", he told MPs during Prime Minister's Questions.
Twenty-two photos of alleged abuse were shown at the court martial of three Royal Regiment of Fusiliers soldiers.
The "vast majority" of soldiers who served in Iraq had done so with "courage and great honour", he added.
Mr Blair told MPs that the circumstances leading to the images, which allegedly show Iraqi detainees being forced to simulate sexual acts and being tied up and threatened, would be fully investigated.
"The difference between democracy and tyranny is not that in a democracy bad things don't happen," he said.
"It is that in a democracy, when they do happen, people are held to account.
"That is what is happening under our judicial system."
Tory leader Michael Howard said the photographs, which were also published in Wednesday morning's newspapers, brought "shame on our country".
But he added they did not "reflect the character" of British armed forces.
The pictures emerged at the court martial on Tuesday where L/Cpl Darren Larkin, Cpl Daniel Kenyon and L/Cpl Mark Cooley face nine charges of abuse dating back to May 2003.
L/Cpl Larkin has admitted one charge of assault but denies one further charge.
The two other soldiers deny all of the allegations they face.
The three are accused of abusing looters detained at their camp near Basra, southern Iraq, after attempting to steal powdered milk and food.
Defence counsel told the court in Osnabruck, Germany, that Cpl Kenyon could be described as a "war hero" who had saved several of his colleagues' lives.
Joseph Giret, defending Cpl Kenyon, blamed commanding officers who had given an order to catch thieves and "work them hard".
The prosecution said that command contravened the Geneva Convention, but added that the three soldiers' behaviour had gone well beyond the order.
Politicians from all parties agree that the UK's reputation abroad could suffer.
Sir Mike Jackson would not comment on the case
Liberal Democrat deputy leader Sir Menzies Campbell said that British forces in Iraq would now find it difficult in the "sensitive run-up to the election on 30 January".
And Foreign Secretary Jack Straw said the photos were "disgusting and degrading" and would damage the image of the UK overseas.
On Tuesday the head of the British Army, Gen Sir Mike Jackson, condemned abuse but would not comment on the pictures.
L/Cpl Larkin, 30, from Oldham, Greater Manchester, has admitted one charge of assaulting an unknown man in May 2003, but denied another charge.
Cpl Kenyon, 33, and L/Cpl Cooley, 25, from Newcastle, have entered not guilty pleas.
The court martial, expected to last three to four weeks, comes days after a US soldier was sentenced to 10 years in jail for abusing prisoners at Abu Ghraib jail, near Baghdad.