The most senior US official in Iraq, Paul Bremer, announced that more than 500 Iraqi prisoners held without charge would be released from prison today in what he described as a gesture of goodwill.
The move follows pressure behind the scenes from British officials in Baghdad who have been alarmed at the large numbers of Iraqis scooped up by the American military during routine operations.
In a move apparently designed to deflect growing criticism of America's human rights record in Iraq, Mr Bremer said today's release of prisoners was in the interests of "reconciliation".
"It is time for Iraqis to make common cause in building the new Iraq," he said.
Meanwhile yesterday a British soldier died following what the Ministry of Defense called a "tragic incident" on a training range near Basra and 35 American soldiers were wounded in a mortar attack on a US base west of Baghdad, the US military said.
Officials at the Coalition Provisional Authority (CPA) in Baghdad have recently reviewed the issue of detainees after numerous complaints from Iraqis that their relatives have simply disappeared.
"There needs to be a process which is conciliatory to the degree that those who are not involved in gross crimes are released back to their communities as soon as possible, in the spirit of broader reconciliation," one British official said.
"All they do is put a bag on their heads, bind their hands behind them with plastic handcuffs and take them away. Families don't know where they go," Malek Dohan al-Hassan, the head of the Baghdad lawyers' syndicate complained last month. "They violate human rights up to their ears."
The 506 detainees to be freed represent about 4% of the 12,800 prisoners in US custody in Iraq, a figure that includes 4,000 members of an anti-Iranian militia. None of the detainees has been charged. Some have been in jail for nine months. The US military has refused to allow them to see a lawyer. There have also been consistent complaints from former detainees that US soldiers have beaten them up or forced them to stand for hours with their hands in the air.
Officials said the first 100 prisoners would be released today from Abu Ghraib, the infamous prison west of Baghdad, once used by Saddam. Mr Bremer promised that the families of those still being held in US prisons would be given more access to their relatives. He added that those released would have to sign a statement renouncing violence and ask a tribal leader to take responsibility for them.
The US also announced it was quadrupling the amount of money to be spent on political transition in Iraq ahead of the handover of power in July to a provisional Iraqi assembly. At the same time, new rewards were offered for information leading to the killing or capture of 30 Iraqis suspected of directing the insurgency against US occupation, he said.
US officials said the coalition intended to take an "increasingly aggressive" attitude to Iraq's resistance while offering a "carrot" to those prepared to collaborate with US rule.
The US military has so far detained or killed 43 of the 55 Iraqis on its original "most wanted list". But Saddam's arrest last month appears to have had little impact on the insurgency.
The Bush administration has already announced a $10m (£5.5m) reward for Izzat Ibrahim al-Douri, Saddam's Ba'ath party deputy and Iraq's most wanted man, together with $1m bounties for 12 other senior Ba'athists.
Yesterday's amnesty coincided with another day of unrest across Iraq. In Falluja, US troops killed an Iraqi couple after firing a shell at their house. The couple - Ahmed Hassan Farhoud, 37, and his wife Suham Omar, 28 - had been sitting at home, neighbors said. Neighbors said US troops had mistakenly thought they had been shot at from the Hassan house. "They brought in their tank and fired from 200 meters away," one neighbor, Raad Majeed, said.
· The government confirmed that six Iraqis had died in the custody of British forces and that it had paid £8,125 in compensation to the families of three Iraqi civilians allegedly killed by British troops.
The incidents were raised in the Commons yesterday by the Plaid Cymru MP Adam Price, who disclosed this week that the MoD had admitted that 23 Iraqi families had claimed compensation after the deaths of civilians and that it had made "ex gratia" payments to three of them.
© Guardian Newspapers Limited 2004