"Eight people, including five men and three women, were killed by a US air strike targeting their home. They are all members of the same family," Firaz al-Duri, first lieutenant of Al-Dawr police said.
The US military confirmed that it hit a house near Tikrit but said the target was an al-Qaeda operative.
It said seven people, including a suspected bomb expert, were killed in the raid.
"A suspected al-Qaeda in Iraq (AQI) terrorist, alleged to lead improvised explosive device facilitation and brag about his victims, was killed by coalition forces during an operation in the Tikrit area," a statement said.
Helicopter attack
Witnesses said that US forces had surrounded the house before helicopters fired missiles at it.
"An armed man appeared in the doorway and coalition forces, perceiving hostile intent based on the man's actions, engaged him," the US military statement said.
"Later he was determined to be the suspected terrorist. Despite nearly an hour of multiple calls and warnings that the force would engage them, the individuals inside refused to come out."
The US military acknowledged that three women were among the dead but added that troops rescued an Iraqi child from the rubble and took him to a nearby base for medical treatment.
"Sadly, this incident again shows that the AQI terrorists repeatedly risk the lives of innocent women and children to further their evil work," Colonel Jerry O'Hara, the US military spokesman said.
Imad al-Juburi, a doctor at Tikrit general hospital, said the bodies of eight people were brought in and the victims appeared to have died of injuries consistent with an air raid.
The US has previously ordered investigations after incidents involving the deaths of Iraqi civilians, but the results of these have rarely been published.
According to independent estimates, about 95,000 civilians have been killed in Iraq since the US-led invasion in March 2003.
In January, the Iraqi government and the World Health Organisation estimated that between 104,000 and 223,000 civilians and military personnel had been killed in the country since the invasion.