Hospital sources in Arbil said four Americans were among the dead, while Kurdistan Democratic Party (KDP) external relations official Hoshyar Zebari said 12 Kurdish peshmerga fighters were killed and 44 wounded.

Among the seriously wounded was Wajih Barzani, 33, the head of KDP special forces and brother of party leader Massoud Barzani.

Barzani was in intensive care, Zebari said, adding: "We are worried" about him.

"There was (Iraqi) firing and the American special forces asked for close air support, but unfortunately two aircraft bombed the joint forces," Zebari said.

The US Central Command admitted in a statement released later Sunday that "coalition aircraft may have engaged special operations and friendly Kurdish ground forces approximately 30 miles (50 kilometres) southeast of Mosul.

"Coalition aircraft were conducting close air support missions at the time (around 0915 GMT), and were in coordination with ground forces, the statement from the US command at the Prince Sultan Airbase in Saudi Arabia said.

"The circumstances contributing to the incident are under investigation and unknown at this time."

A BBC correspondent who witnessed the incident at Dibaga, 20 kilometres (12 miles) south of Arbil, said he counted 10 to 12 bodies after the air strike, some of them US special forces personnel.

John Simpson, who also suffered minor injuries in the attack and said his translator was seriously hurt, said a bomb was dropped from a US plane some four metres (yards) from where he was standing.

The convoy of eight or 10 cars was being escorted by US special forces travelling in two trucks, he said.

"The Americans saw this convoy and they bombed it and they hit their own people. They've killed a lot of ordinary characters. I've counted 10 or 12 bodies around us, so there are Americans dead.

"This was a really bad own goal by the Americans. We don't know how many Americans are dead," Simpson said.

"This is just a scene from hell here, all the vehicles on fire. There's bodies burning around me, there's bodies lying around, there's bits of bodies on the ground," he added.

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