The report has triggered anti-US rallies in the Muslim world
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US magazine Newsweek has said it erred in reporting that a copy of the Koran had been flushed down a toilet at Guantanamo Bay by US interrogators.
It said a US military investigation had failed to corroborate the story and apologised for carrying the report.
At least 15 people have been killed in anti-US riots in Afghanistan following the article's publication last week.
The US military in Afghanistan says, however, there will still be an investigation into the allegations.
Several claims of desecration of the Koran have been made by former inmates of the US facility in Cuba.
As well as the deaths in Afghanistan, more than 100 people have been injured in violent protests across the Muslim world, from Pakistan to Indonesia.
'No longer sure'
In Pakistan, an alliance of six conservative Islamic parties has already rejected Newsweek's retraction.
Alliance leader, Qazi Hussain Ahmed, said it was "a crude attempt, both by the weekly magazine and the American authorities to defuse the anger of the Muslims across the world".
In its latest edition, Newsweek's editor writes that its original source is not sure where he saw the assertion.
"We regret that we got any part of our story wrong, and extend our sympathies to victims of the violence and to the US soldiers caught in its midst," the editor, Mark Whitaker, writes.
In its new account, the magazine says that one of its reporters spoke to "his original source, the senior government official, who said that he clearly recalled reading investigative reports about mishandling the Koran, including a toilet incident".
"But the official, still speaking anonymously, could no longer be sure that these concerns had surfaced" in a forthcoming report by the US military, the magazine added.
Mr Whitaker told the Reuters news agency that he no longer knew whether the occurrence was genuine.
"As to whether anything like this happened, we just don't know," he said.
Mass protests
The Pentagon has said there is no substance to the specific allegation.
Some 520 people remain incarcerated at Guantanamo Bay
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But a spokesman for the US military in Afghanistan says there will still be a thorough investigation into the claims.
"It is important that the Afghan people see that we take any allegations like this seriously," the spokesman, Col James Yonts, said.
Several Muslim countries, including Pakistan and Saudi Arabia, had strongly condemned the reported allegations and asked Washington to take stern action if they were right.
Violence broke out in several Afghan cities as angry mobs attacked the offices of the UN and international aid agencies.
Insulting the Koran or the Prophet Muhammad is regarded as blasphemy and punishable by death in both Pakistan and Afghanistan.