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By Idrees Ali

WASHINGTON (Reuters) - A U.S. military investigation on Thursday acknowledged that more than 100 civilians were killed in a U.S. air strike on a building in the Iraqi city of Mosul in March during operations against Islamic State militants.

The probe concluded that the U.S. strike in the Al-Jadida district inadvertently triggered explosives placed in the building by Islamic State fighters, causing it to collapse.

Local officials and eyewitnesses have said as many as 240 people may have died in the strike.

It is believed to be one of the single largest incidents of civilian casualties since the U.S.-led coalition started operations against Islamic State in Iraq and Syria.

Air Force Brigadier General Matthew Isler, who oversaw the investigation, told reporters that 101 civilians inside the building were killed, four civilians were killed in the neighbouring building, and 36 civilians were still not accounted for.

Prior to the March 17 strike, Iraqi forces were about 100 meters away and could see two snipers on the second floor of the building. However, Isler said, there were blind zones and the forces could not see parts of the building.

The coalition had been monitoring the area since the operation for western Mosul began weeks before. However, for two days before the strike took place, the coalition did not have overhead surveillance of the area because of the weather, Isler said.

When the 500-pound bomb was dropped on the building targeting the snipers, it triggered explosives inside the concrete structure, collapsing it onto civilians.

The United States and nearby Iraqi forces did not know there were civilians in the building or that it had been rigged with explosives, the probe found.

"This investigation determined that ISIS deliberately staged explosives and snipers to harm civilians," Isler said, using an acronym for Islamic State.

He added that the coalition took responsibility for the air strike.

The investigation found that the chemical signature found in the residues was not associated with the bomb used by the United States, but rather with explosives usually used by Islamic State militants.

It said that analysis concluded that the amount of explosives in the U.S. bomb, about 200 pounds, was not enough to bring down the building. The investigation added that the bomb was dropped at the front of the building while structural engineers found that the damage and crater was at the back of the building.

Seven months since the operation to retake Mosul began, Iraqi forces have removed Islamic State from all but a pocket of territory in the western half of Mosul, including the Old City, where the militants are expected to make their last stand.

The investigation recommended the coalition create a team dedicated to assessing civilian casualties that would more quickly investigate reports of civilian deaths.

The coalition has adapted its intelligence gathering tactics to better identify where civilians are located, Isler said.

Prior to this investigation, the U.S.-led coalition against Islamic State said that at least 352 civilians had been killed in strikes it carried out in Iraq and Syria since 2014. That estimate is far lower than those provided by outside groups.

(Reporting by Idrees Ali; Editing by Alistair Bell and Andrew Hay)

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