The American who was beheaded by militants had told friends he was arrested by Iraqi police in Mosul because he had an Israeli stamp in his passport.
The Mosul police chief today denied having arrested him.
The body of Nicholas Berg, 26, was found last weekend in western Baghdad. Three days later, a videotape posted on an al-Qaeda-related Web site showed Berg decapitated by hooded, armed men.
Questions about Berg's stay in Iraq remain, including the time and place of his abduction. US and Iraqi officials have offered varying accounts of their contacts with the self-employed telecommunications businessman from Philadelphia.
US officials said yesterday that Iraqi police arrested Berg in Mosul on March 24th because they believed he may have been involved in "suspicious activities."
US spokesman Mr Dan Senor would not explain those suspicions but insisted that Berg was held by Iraqi and not American authorities. He said, however, that the FBI visited Berg three times before he was released April 6th.
In e-mails released by his family, Berg wrote about his experiences in trying to track down and later meeting an in-law in the Mosul area. Berg also described his work in seeking to repair communications towers in Iraq.
In Mosul, police chief Maj. Gen. Mohammed Khair al-Barhawi insisted his department had never arrested Berg and maintained he had no knowledge of the case.
"The Iraqi police never arrested the slain American," al-Barhawi told reporters. "Take it from me ... that such reports are baseless."
Berg's family said the young Berg was transferred to American custody soon after his arrest. The family blames American authorities with exposing their son to worsening danger in Iraq by holding him until a flare-up of anti-American violence that set the stage for his abduction and death.