The team is led by a retired senior civilian policeman and consists of military and ex-civilian police detectives.
Announcing that the team has started work today, Mr Harvey said in a Written Ministerial Statement:
"In March my predecessor announced the intention of the previous Government to set up a dedicated Iraq Historic Allegations Team (IHAT) to investigate allegations of abuse of Iraqi citizens by British service personnel that have been brought to the MOD's attention.
"The Government has endorsed the continuation of this approach, and we are determined to ensure that these allegations are investigated thoroughly and as quickly as possible.
"I would like to inform the House that the IHAT team now has a full investigative capability and has commenced work. The team is led by a retired senior civilian policeman and consists of military and ex-civilian police detectives who will ensure that each allegation is appropriately investigated.
"Given the volume of allegations and the complexity of investigating the events in question, we anticipate that it will take around two years to complete the work of the IHAT.
"There are those that argue that the Government should hold a public inquiry into these unproven allegations now – we disagree. A costly public inquiry would be unable to investigate individual criminal behaviour or impose punishments. Any such inquiry would arguably therefore not be in the best interests of the individual complainants who have raised these allegations.
"Nevertheless, the Secretary of State for Defence has not ruled out holding a public inquiry at some point in the future, should serious and systemic issues emerge from IHAT's investigations that might justify it.
"The establishment of the IHAT should not be taken as an admission of fault or failure. These allegations are as yet unproven, but their existence is corrosive to both the morale and reputation of our armed forces. We owe it to them, and the complainants, to properly investigate these allegations and that is exactly what the IHAT have now started to do."