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The Ministry of Defence said the alleged incident took place at Camp Bread Basket in Iraq in May 2003.
"This allegation has been referred to the Royal Military Police for investigation," an MoD spokesman said.
He said all allegations of abuse are "investigated thoroughly and where proven those responsible are punished".
Better training
The claim of abuse comes just days after it was announced that the MoD would pay nearly Ј3m to Iraqis who were tortured by British troops in Basra in 2003.
Among those receiving compensation are the family of 26-year-old Baha Mousa who was beaten to death in custody.
Following the latest abuse allegation, the MoD said: "The Army has done a great deal since cases of abuse related to the death of Baha Mousa in 2003.
"Procedures and training have been improved. But we are not complacent and continue to demand the very highest standards of conduct from all our troops."
It added that "all but a handful" of British troops - more than 120,000 in total - who have served in Iraq since 2003 "have conducted themselves to the highest standards of behaviour, displaying integrity and selfless commitment".
Mr Mousa died while in the custody of the former Queen's Lancashire Regiment.
No regiment has yet been named in connection with the latest allegation.
According to the Independent on Sunday newspaper, the boy, now aged 19, is launching a civil case against the MoD.
(BBC)
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