Cellphones belonging to relatives of soldiers killed in Iraq and Afghanistan were reportedly hacked by British tabloid News of the World.
It is the latest allegation in a phone-hacking scandal that is raising questions about British journalism, police and the political establishment.
The Daily Telegraph reports the phone numbers of relatives of dead British soldiers were found in the files of private investigator Glen Mulcare.
The News of the World is already accused of hacking the phones of a teenage murder victim, families of murder victims, relatives of people killing in the 2005 London bombings and many politicians and celebrities.
News International, the parent company of the News of the World, says if the allegations are true, it is absolutely appalled and horrified.
The opposition Labour Party wants an immediate public inquiry, but Prime Minister David Cameron says it must wait until a police investigation is carried out.
Mr Cameron's friendship with former News of the World editor Rebekah Brooks is under increasing scrutiny as calls continue for Rupert Murdoch to remove her as his current News International chief executive in the United Kingdom.
Labour have repeated their calls for Ms Brooks to resign.