"A Task Force 1st Armored Division commissioned officer was formally charged... with the murder of an Iraqi man," the military said in a statement.

"The charge stems from a May 21 incident which took place near Kufa. Soldiers conducted a high-speed chase with a vehicle that they believed to be carrying suspected members of Moqtada Sadr's militia," it said.

"During their pursuit, soldiers fired at the vehicle, wounding the driver and passenger. Shortly afterward, the driver was shot and killed at close range."

The military was referring to an incident in which Sadr aide Mohammed al-Tabtabai was arrested by US troops as he headed back from Kufa to its twin city of Najaf, 160 kilometres (100 miles) south of Baghdad.

The army officer will undergo the US military's article 32 probe, the equivalent of a grand jury hearing that could initiate court martial hearings against him.

A full court martial could result in the officer being jailed, fined and kicked out of the army.

Sadr's Mehdi Army militia has battled the US military around the Shiite shrine cities of Najaf and neighbouring Kufa, a stronghold of the cleric, for more than two months.

The US military has started to announce probes into the conduct of soldiers and officers after the shocking revelations of the Abu Ghraib prison scandal, in which prisoners were sexually humiliated and physically beaten by guards.

The army first announced an investigation into the shooting on June 4.

WAR.WIRE