This story isn't getting much play in the press but it is being reported that the US used chemical weapons during the bombardment of fall's in 2004.
White phosphorus is a spontaneously flammable chemical used in battlefield illumination. Contact with the substance results in burning and melting of skin and flesh. According to an account of a former US soldier, the phosphorus explodes and forms a plume, killing everyone within a 150 metre radius. White phosphorus bombs are considered incendiary devices, though RAI claims that they are chemical weapons.
The US military admits using white phosphorus to illuminate battlefields, but denies having used it as a weapon against civilians. The United States has ratified the Chemical Weapons Convention (CWC), but has not ratified the "Protocol on Prohibitions or Restrictions on the Use of Incendiary Weapons (Protocol III)" (.pdf) which forbids the use of incendiary weapons against places with
concentrations of civilians. source
Of course the military denies this saying the bombs were used on legitimate military targets. However, a British Commander noted that 30 MK 77 weapons were used on military targets in Iraq between March 31 and April 2, 2003.
According to a protocol that was added to the Geneva Convention in 1980, the use in incendiary weapons against civilians is banned, however the US government didn't sign that protocol. And we know what this Administration thinks of the Geneva Convention.
I'm not sure what the story is here. There is a legitimate use for MK77, but it is one thing drop to light up a desert floor and quite another to drop into the middle of a city the size of fall's.