Appearing as a witness at the Congressional committee investigating military misinformation from the battlefield, Jessica Lynch said: "Tales of great heroism were being told. My parent's home in Wirt county [West Virginia] was under siege of the media all repeating the story of the little girl Rambo from the hills who went down fighting. It was not true."
Ms Lynch was a 19-year-old private captured by Iraqis in an ambush at Nassiriya in the opening days of the war and subsequently rescued by US forces.
She told the committee: "I have repeatedly said, when asked, that if the stories about me helped inspire our troops and rally a nation, then perhaps there was some good.
"However, I am still confused as to why they chose to lie and tried to make me a legend when the real heroics of my fellow soldiers that day were, in fact, legendary." She said the US people did not need to be told "elaborate tales". She concluded: "The truth of war is not always easy to hear but it always more heroic than the hype."
When she was captured at Nassiriya, the US military told the media she had been wounded but carried on firing until the end.
She had in fact been riding in a truck and had not been firing a weapon. The US military also presented her escape as a heroic feat, ignoring the role of friendly Iraqi medical staff in the rescue.
Ms Lynch said she was not politically motivated and supported the troops in Iraq. But she added: "I believe this is not a time for finger pointing. It is time for the truth, the whole truth, versus misinformation and hype."
The House committee on oversight and government reform, chaired by the energetic Democrat Henry Waxman, is focusing on two incidents, Ms Lynch's capture and rescue, and the death of an army corporal, Pat Tillman, a former football star, in Afghanistan in 2004. Corporal Tillman's death attracted media attention because he had turned down a $9m (£4.5m) football contract to volunteer for service.
Mr Waxman accused the government of inventing "sensational details and stories" about Cpl Tillman and Ms Lynch.
Although the US defence department reported Cpl Tillman had been killed by enemy combatants while leading an attempt to rescue US troops, five weeks later it finally emerged he was killed by friendly fire.
His younger brother, Kevin, also giving evidence yesterday, accused the US military of "intentional falsehoods" and "deliberate and careful misrepresentations" in portraying his death as the result of heroic engagement with the enemy.
"We believe this narrative was intended to deceive the family but more importantly the American public," he said. "Pat's death was clearly the result of fratricide [friendly fire]."
Kevin, who had been in a convoy behind his brother, said the heroic account was to distract attention from the Abu Ghraib prison scandal and other setbacks in Iraq. "Revealing that Pat's death was a fratricide would have been yet another political disaster in a month of political disasters ... so the truth needed to be suppressed."
He said the military attempted to give the killing "a patriotic glow", awarding his brother a Silver Star and concocting a story that was complete fiction.
In Iraq yesterday, the US military said that nine paratroopers had been killed in a suicide attack on army outpost at Diyala, north of Baghdad, one of the most lethal attacks on US personnel since the invasion.