It was not clear if the decision was linked to a demand by Arab Sunnis opposed to a draft constitution that authorities release Sunni prisoners so they can participate in a referendum on the text and elections later this year.

"I know this is a big one, but I can't say if it is related to anything that is going on," said US military spokesman Lieutenant Colonel Steven Boylan.

Whether or not it was part of negotiations on the charter, the release is likely to ease concerns over the estimated 10,000 Iraqi prisoners held in US detention centres in the country.

"This is a good move that we definitely welcome," said Hussein al-Falluji, one of 15 Sunnis on the panel drafting the constitution.

The plight of prisoners in the US-run Abu Ghraib, once one of Saddam Hussein's most feared prisons, has been one the most emotional issues for Iraqis since a US-led invasion toppled the former Iraqi president in 2003.

A scandal broke in the facility west of Baghdad last year when leaked photographs of US military guards abusing prisoners and forcing them to simulate sexual acts provoked an international outcry.

"This major release, the largest to date, marks a significant event in Iraq's progress toward democratic governance and the rule of law," said a US military statement.

US military officials say detainees sent to Abu Ghraib typically spend six months to a year in custody before a decision is made in Iraqi courts on whether to prosecute them.

US military lawyers in Baghdad have estimated that 80 to 85 percent of those arrested by US forces are released without being convicted.

Leaders of the Sunni community, the seat of the insurgency, have complained that lengthy detentions without charge, during which prisoners have no access to lawyers or family, are unfair.

The military said the released prisoners were not guilty of serious crimes such as bombings, murder, torture or kidnapping and had renounced violence.

Shia and Kurdish leaders dominating the government, are hoping to get Sunni leaders on board for the constitution in a bid to neutralize the insurgency.

But negotiations over the charter, described as a blueprint for democracy by Shias and Kurds, and a possible trigger for civil war by the Sunnis, have been deadlocked for weeks.

Sunnis are a minority sect which favors a strong central government and are fiercely opposed to federalism, fearing they would be deprived of Iraq's vast oil resources near the Kurdish north and in the Shia south.

Falluji said Sunni leaders would review what Shias called a concession on federalism. But he was not optimistic.

"I don't think there will be an agreement because we find federalism in principle unacceptable and that has been our position from the start."

The fate of former members of Saddam's Baath party is also a sticking point. Hardline Shia politicians say they should never be allowed back into public life. Sunnis advocate a softer approach, saying not all of them have blood on their hands.

"There was a concession on Baathism but we believe this is a political matter and we should not include it in the constitution at all," said the Sunni Falluji.

Sunni leaders said if no major concessions are made, they will mobilize the community to vote "No" in an October referendum on the charter, raising the possibility of a fierce political battle while the insurgency rages.

Under Iraq's interim constitution, if two thirds of voters in three of Iraq's 18 provinces vote "No," the charter is rejected and parliament dissolved before December elections.

Arab Sunnis form a majority in three provinces, Anbar, Salaheddin and Nineveh.

Iraq's top Shia cleric, Grand Ayatollah Ali al-Sistani, urged all Iraqis to register to vote in the referendum, a message sure to inspire the majority 60 percent Shias.