When the US military set about interrogating supposed terrorist suspects during the uprising against coalition forces following the invasion of Iraq, they deployed two psychological weapons - dogs and women's underwear.

Arabs are terrified of dogs, the military doctrine went, so why not do the “doggy dance”, whereby guards would let the animals snap and snarl so ferociously in the face of the prisoners that they would wet themselves? If that failed, there was no better way of humiliating macho Arabs than by stripping them naked in front of female guards and dressing them in knickers.

In Abu Ghraib, Saddam Hussein's prison and execution factory that the Americans took over with the administration of the whole country in 2003, there was a large box of pink underpants. “They were almost like a bikini panty,” a guard recalled. “It wasn't a thong, but it wasn't a full-bottom panty either. It was one that showed like half the cheek. It was like a 1970s bikini bottom. So it was kind of skimpy, and it didn't really look well on men.” That guard, enlisted in the Military Police, thought the underwear business in Abu Ghraib was “kind of odd”, although he assumed “humiliation is a tactic for getting someone to cooperate”. When the knickers and the dogs didn't do the trick, the guards would ratchet it up a level by forcing prisoners to masturbate.

Standard Operating Procedure is full of testimony such as this that will make all instinctive pro-Americans (including those of us who made half-hearted efforts to persuade ourselves of the wisdom of the Iraq invasion) grind their teeth. This is a book not about the war, but about the infamous photographs taken by military personnel. We are already familiar with Lynndie England, the designated villain of the scandal, leading a prisoner on a dog leash; then there was the mock-electrocution scene, and the pyramid of handcuffed, naked Iraqis, framed by grinning American servicemen.

Those images from inside Abu Ghraib were shocking enough when they surfaced, but this compelling book is more disturbing still. Although the camera didn't exactly lie, it didn't tell the whole truth. The book is based directly on the testimony of the American military guards - as recorded by the film-maker Errol Morris and woven into a narrative by Philip Gourevitch, the author of a fine book about Rwanda's genocide.

Once Saddam's administrative apparatus was swept aside, law and order in Iraq fell under control of the 18th Military Police Brigade. The problem was that there had been no proper planning, and no provision for holding and interrogating prisoners. President Bush deliberately created a legal murk by classifying Iraqi internees as unlawful combatants rather than POWs; guards and interrogators could invent the rules as they went along.

The MPs did the guarding and the transporting of the prisoners, but military intelligence, aided by shadowy figures from the CIA and FBI, did the interrogating. Not only was the treatment of prisoners grotesque, it didn't work. No proper records were kept; robbers were incarcerated with terrorists, children with rapists; three quarters of the prisoners were eventually released without charge, and little useful intelligence was squeezed out of the serious insurgents.

This book chronicles how essentially decent men and women can lapse into barbarism in the absence of leadership. In the early “hearts and minds” phase, some of the MPs wanted to create a model penal system in Iraq, but soon they sank into the morass created by the Bush administration's incompetence, and the deteriorating security situation around Baghdad. It is astonishing to read of the abysmal discipline in parts of the American military. The women were hopping between the beds of the married men, and the prison was awash with alcohol and porn. Among the guards, discipline was so slack that they started taking digital photographs of the abuse. Sabrina Harman, an MP reservist, whose grinning features and thumbs-up gestures appeared in some of the most notorious pictures of dead Iraqis, could literally not hurt a fly; in the early days of the occupation, she would give little presents to Iraqi children. She was a gentle lesbian who wrote anguished e-mails to her “wife” in America about the horror around her and her own sense of guilt.

The motives of those who took the photographs are confused: for some it was just a thrill, but others wanted to log the abuse, while some were readying themselves to blow the whistle. Yet there was nothing furtive about the mistreatment. One guard had the pyramid shot of naked Iraqis as the screen-saver on his work computer. A lieutenant-colonel, told of the forced masturbation, did nothing.

When the pictures inevitably began to leak out, the Pentagon erupted in righteous indignation and ordered a full investigation. The junior ranks took the brunt of the backlash from Washington, and some were given long sentences and dishonourable discharges. But no senior officer was found guilty of serious malpractice. Sabrina Harman, who had taken photos of a dead prisoner, got six months; the men who beat him to death were never charged.

This is a disturbing postscript to the dreadful story of the Iraq invasion. It is lightened only by occasional flashes of kindness from some of the young recruits who had just enough humanity and self-awareness to know how low they had sunk. There is shame all around, but it is clear from reading this extraordinary book that the real culpability lies in Washington.

Standard Operating Procedure by Philip Gourevitch and Errol Morris
Picador £16.99 pp296 Buy the book £15.29 plus free delivery

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