The US military on Monday denied reports that Jordanian-born terrorist Abu Musab al-Zarqawi had been captured in Iraq by the coalition forces.

"It's not true," said Brig. Gen. Mark Kimmitt, the coalition's deputy director of operations.

Earlier, rumors were spread in Baghdad streets that Zarqawi was already in custody and Iraqi police seemed happy with the news.

A 1st lieutenant who named himself Munem told a Xinhua correspondent he was sure that the terror leader had been detained.

Zarqawi, a suspect terror mastermind with links to Bin Laden's al-Qaida group, was said to have been behind a series of deadly attacks in Iraq. A reward of 10 million dollars has been put on his head.

Source: Xinhua