SYDNEY (AFP) - The Australian Defence Force said on Friday it was investigating an incident of "potential misconduct" by troops in Afghanistan following a report that a dead insurgent's hands were cut off.

The Australian Broadcasting Corporation said elite special forces were under investigation for mutilating the corpse of at least one person following a fierce battle in Zabul province in April in which four enemy fighters were killed.

"The ABC understands the hands were removed from an insurgent's corpse and taken back to the Australian base at Tarin Kot," the broadcaster said on its website.

It said it understood the soldiers were accused of cutting off the hands for the purpose of obtaining fingerprints, adding that troops are asked to collect fingerprints and eye scans from dead insurgents where possible.

The Australian military confirmed it was investigating an incident that occurred during a combined operation between Afghan National Security Forces and Australia's Special Operations Task Group on April 28.

"The combined operation was targeting an insurgent commander responsible for a key insurgent network operating in and around Uruzgan province," it said in a statement.

"During the clearance operation, Australian personnel were engaged in a high intensity, complex and dangerous battle. Four insurgents were engaged and killed during the battle.

"Following the mission, an incident of potential misconduct was raised through the ADF's internal command chain."

The Australian Defence Force (ADF) said it took any potential misconduct seriously and had started an investigation with the International Security Assistance Force (ISAF) in Afghanistan immediately after it was reported.

The Afghan government had also been informed.

The ADF added that as the investigation was ongoing, it could make no further comment but said Australian troops operated under strict rules of engagement that were consistent with international law.

"The ADF also takes all reasonable steps to ensure its operations do not breach Afghan customs or cause offence by inadvertently disrespecting religious beliefs or norms," it said.

Prime Minister Kevin Rudd said he was confident that defence chiefs would carry out a proper investigation.

"I have full confidence in the Australian Defence Force, I have full confidence in our men and women in uniform in Afghanistan, I have full confidence in their professionalism," he told reporters in Perth.