Newsweek ran a sensational claim based on an anonymous source who turned out to be completely wrong. While one can't blame the subsequent violence entirely on this report, it's fair to say that credulous reporting like this contributed to a climate in which many innocent Muslims died.
The inaccurate Newsweek report appeared in the magazine's March 17, 2003 issue, on the eve of the invasion of Iraq. It read in part:
"Saddam could decide to take Baghdad with him. One Arab intelligence officer interviewed by Newsweek spoke of 'the green mushroom' over Baghdad--the modern-day caliph bidding a grotesque bio-chem farewell to the land of the living alongside thousands of his subjects as well as his enemies. Saddam wants to be remembered. He has the means and the demonic imagination. It is up to U.S. armed forces to stop him before he can achieve notoriety for all time."
Unlike a more recent Newsweek item (5/9/05), involving accusations that Guantanamo interrogators flushed a copy of the Quran down a toilet, Newsweek has yet to retract the bogus report about the "green mushroom" threat. The magazine's Quran charge has been linked to rioting in Afghanistan and elsewhere that has left at least 16 dead; alarmist coverage like Newsweek's about Saddam Hussein's nonexistent weapons of mass destruction paved the way for an invasion that has caused, according to the best epidemiological research available (Lancet, 11/20/04), an estimated 100,000 deaths.
This wonderful comparison is from FAIR, and was previously diaried here. However, that diary apparently didn't get much attention, and I think the point bears more emphasis, especially in light of recent reports that tend to corroborate the Koran story (link, link).
Credit is due to scorponic for that earlier diary.