Iraq is officially denying that a shooting incident involving Saddam Hussein's summer palace guards took place but at the same time offering assurances it won't happen again, the U.S. military said Tuesday.

In another development, an American reporter for The Associated Press and his Kuwaiti translator were released Tuesday in Baghdad, two days after they were seized by Iraqi police near the southern border with Kuwait.Meanwhile, the allied Operation Provide Comfort was succeeding in its aim of taking the Iraqi Kurdish refugees back home from the ragtag mountain camps on the Turkish border, an army spokeswoman said.

But the spokeswoman, Army Capt. Marcella Adams, said the accelerating return of the Kurdish refugees to the lowlands may necessitate building a third temporary camp near the Iraqi border town of Zakho.

The Kurds fled to the mountains after their failed anti-government uprising in the wake of the Persian Gulf war.

Adams also provided more information on Monday's shooting incident at one of Saddam's summer palaces near the northern Iraqi town of Sirsenk.

In that incident, British soldiers monitoring one of Saddam's palaces said they were fired on by Iraqi soldiers and fired back. The allies have allowed the Iraqi soldiers to guard the complex.

Adams - speaking from allied headquarters at Incirlik Air Base in southern Turkey - said an Iraqi official said the incident was an isolated one and promised it would not be repeated.

Adams did not name the official who offered the assurances.

Late Monday, another U.S. military spokesman, Air Force Lt. Col. Philip Crowley, said the Iraqis had told the allies that two of their soldiers who shot at a Royal Marines patrol were hit by the return fire.

An official Iraqi statement released in Baghdad on Monday night had denied any exchange of fire at all or any casualties, and Adams said that was still the official Iraqi position Tuesday.

Regarding the refugees, Adams expressed hopes that the mass transport operation launched in recent days with 55 buuses and 45 rented trucks would take less time than planned.

She said plans were to transport 7,000 people a day but that 12,000 had been moved on Monday. More than 220,000 refugees were listed as having returned to northern Iraq, with an estimated 204,000 still in the mountains.

The first provisional tent settlement at the outskirts of Zakho had a capacity crowd of more than 18,000 refugees. In a second settlement being set up nearby, there were already about 8,000 refugees living in 1,075 tents.

Adams said the third camp was being considered by the allied officials as 15,000 other refugees have applied to move into the camp.

"The main problem continues to be Dohuk," Adams said, referring to the reluctance of the Kurds from there to return to the provincial capital unless the city was included in the allied-controlled, 3,600-square-mile security zone along the Turkish border.

Contrary to the wishes of many Kurds, U.S. Army Lt. Gen. John Shalikashvili told reporters Monday that the allied command was making no plans to take control of Dohuk from the Iraqis.

Shalikashvili came to Iraq to participate in a U.N. flag-raising ceremony, celebrating the transfer of administrative control of the first U.S.-run refugee camp to the United Nations High Commissioner for Refugees.

U.N. special envoy Prince Sadruddin Aga Khan also attended the ceremony, held on a grassy knoll between the two American-run camps near Zakho, and saluted the coalition soldiers for building and maintaining the camp.

The Associated Press reporter released by the Iraqis was Mark Fritz, 35, who is based in Berlin..