The Iraqi government is to launch a new investigation into one of the most controversial incidents of the Iraq war, after the release of a diplomatic cable alleging that US soldiers handcuffed and executed women and children during a 2006 raid.

The troops were also accused of calling in an air strike to destroy evidence.

An adviser to the Iraqi prime minister, Nouri al-Maliki, said on Friday that previous inquiries had stalled but the government would revive its investigation as a result of the new information.

In 2006 there were conflicting accounts of what had happened at Ishaqi village, north of Baghdad; troops said nothing inappropriate had taken place, but villagers suggested the deaths had been a revenge attack for the earlier killing of two soldiers.

A diplomatic cable released this week by WikiLeaks revealed that a United Nations official, Philip Alston, told the US in 2006 he had received information that all the residents of the house had been shot in the head. His intervention was not made public at the time.

The letter has inflamed opinion in Iraq at a sensitive time in US-Iraq relations, amid difficult negotiations over retention of US bases in Iraq after the scheduled departure of US troops in December.

Iraqi officials said the new information was sufficient cause to deny the Americans any bases and demand all troops leave.

"The new report about this crime will have its impact on signing any new agreement," an Iraqi parliamentarian, Aliya Nusayif, told the AP. She said Iraq's parliament would investigate and seek to prosecute any US soldiers who commit crimes in Iraq in the future.

As part of the negotiations over keeping US troops in Iraq, Washington is demanding immunity for all US military personnel. But Maliki's spokesman, Ali al-Moussawi, said: "We will not give up the rights of the Iraqi people, and this subject will be followed."

The leaked state department memo, dated 27 March, 12 days after the incident, says that the US mission in Geneva had received a letter from Alston, the UN special rapporteur on extrajudicial, summary or arbitrary executions. In his letter, Alston said he had received various reports on the killings, and the dead included Faiz Hratt Khalaf, 28, his wife, three children, his mother, sister, two nieces, a three-year-old and a visiting relative.

"According to the information received, American troops approached Mr Faiz's home in the early hours of 15 March 2006. It would appear that when the MNF [multinational forces] approached the house, shots were fired from it and a confrontation ensued for some 25 minutes. The MNF troops entered the house, handcuffed all residents and executed all of them. After the initial MNF intervention, a US air raid ensued that destroyed the house," Alston wrote. He added: "Iraqi TV stations broadcast from the scene and showed bodies of the victims (ie five children and four women) in the morgue of Tikrit. Autopsies carried out at the Tikrit hospital's morgue revealed that all corpses were shot in the head and handcuffed."

Alston, who is now a professor at New York university, told a reporter for the McClatchy group of newspapers that the US had not responded to his letter – as was "the case with most of the letters in the 2006-2007 period", when sectarian and other violence was at its height. The Iraqi government had not responded either.

"The tragedy," he said, "is that this elaborate system of communications is in place but the (UN) human rights council does nothing to follow up when states ignore issues raised with them."

The Pentagon claims the civilians were killed in the air raid but the villagers say the air raid came after the killings. Three months after the attack, the Pentagon said it had conducted its own investigation and the allegations of the execution were absolutely false and there had been no cover-up.

Lieutenant-Colonel James Gregory, a Pentagon spokesman, responding to the Alston letter and the Iraqi government announcement that it is to revive its inquiry, said on Friday: "The incident was properly investigated at the time and no new information has surfaced."