A US tank has killed three Iraqi children when it opened fire on suspected insurgents in the restive city of Fallujah, west of Baghdad.

A tank crew observed Friday three men that appeared to be installing a roadside bomb on the side of a highway southeast of the city and opened fire with its main gun. The men escaped and three children were found dead, AFP reported Saturday.

"Civilians in the area reported two children, ages seven and nine, were killed by a blast in the area by the canal," said the statement which was issued on Saturday.

"A third, age 11, was transported by civilians to the Jordanian hospital nearby but later succumbed to his wounds."

The military could not say if the children died as a direct result of their shell.

"Due to dust and debris, the tank crew's view of the blast was obscured immediately after they fired. It is not clear at this time if there were secondary explosions at either site from IED material," the statement said.

The three suspected insurgents meanwhile escaped, though one appeared to have been injured.

RH/IS