Britain offered on Tuesday to pay compensation for personal injuries and damage to buildings caused when its troops raided a prison in southern Iraq last month to free two British special forces soldiers, Reuters reported. "We regret the incidents that took place in Basra on 19 September 2005. We also regret the casualties on both sides and the material damage to public facilities," local British and Iraqi authorities said in a joint statement. "The British Government is prepared to pay valid claims for compensation for casualties and material damage in the well-established manner," it said. The statement was released by the Foreign Office in London. The incident, in which the two soldiers who had been operating undercover in Basra were captured by Iraqi police after a firefight and then taken by militant militias, badly soured diplomatic relations between Britain and Iraq.