The US military said an airstrike in Falluja today targeted a known safe house used by a network of fighters led by Abu Musab al-Zarqawi, a militant accused of links to al Qaeda.
Brigadier General Mark Kimmitt said he did not dispute Iraqi accounts that around 20 people were killed in the strike.
He said there was "significant intelligence" that members of the network were in the house, but there was no evidence Zarqawi himself was there.
The airstrike left victims crushed under rubble after two missile strikes demolished the house, witnesses said.
Relatives brought 22 bodies for burial to a cemetery after the blast.
"An American plane hit this house and three others were damaged. Only body parts are left," one witness told Reuters.
Falluja residents say US troops have deployed hardline tactics in the town that have killed scores of civilians and created new enemies.
Iraqis dug through the rubble of the flattened house, looking for survivors of Saturday's strike.
At Falluja Martyr's Cemetery, town residents set up a row of 22 graves covered by cement slabs in keeping with the Muslim tradition of quick burial.
"They brought us 22 corpses, children, women and youth," said cemetery worker Mr Ahmed Hassan.
US Marine commanders have said pacifying Falluja, one of Iraq's most rebellious cities, is crucial for stabilising Iraq as the US occupation formally ends on June 30th and sovereignty is handed over to a new Iraqi interim government.
In April, hundreds of Iraqis were killed in fierce fighting between US Marines and guerrillas in Falluja.
A truce was later agreed, under which an Iraqi force was put in charge of security in the city.