The FBI saw Nick Berg, the American civilian beheaded in Iraq, three times while he was being detained by Iraqi police, the US-led occupation authority said on Wednesday.
An Islamist Web site on Tuesday carried a video clip of Berg's beheading, with a statement saying a group linked to al Qaeda carried it out in revenge for the abuse of Iraqis by US troops.
Dan Senor, spokesman for the Coalition Provisional Authority in Baghdad, said Berg had not been in US custody before or after his arrest by Iraqi police on March 24.
"My understanding is that they suspected that he was engaged in suspicious activity," Senor told a news conference.
"US authorities were notified, the FBI visited with Mr Berg when he was in Iraqi police detention and determined that he was not involved in any criminal or terrorist activities," Senor said. "They had contact with him on three occasions."
Brigadier-General Mark Kimmitt, the US military spokesman in Iraq, said US military police had seen Berg during his detention to make sure he was being fed and treated properly.
Berg, whose body Senor said was discovered by a road near Baghdad on Saturday, was in Baghdad from late December to February 1 and returned to Iraq in March.
He did not find work and planned to return home at the end of March, according to his parents.
Berg's communications to his parents stopped on March 24 and he told them later he was jailed by Iraqi officials after being picked up at a checkpoint in Mosul.