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It is true that during the Bush Administration our regular army troops and Marines held urban warfare exercises.. and they were to use frangible rounds to minimize damage.
All troops hold urban warfare exercises. There are numerous facilities across the nation and new ones have been completed recently.
@Joint Readiness Training Center (JRTC) Fort Polk
@The Ultimate Military Training Facility: Technomad @ Zussman Urban Combat Center Aug 10, 2007
@Marines unveil city-size urban warfare training at Twentynine Palms

Now holding them in US cities...that's another matter.
@Project Metropolis Brings Urban Wars to U.S. Cities April 2002

@ ohio mayor kicks out marine's urban warfare drills Feb 15, 2008
Noted here at FR at the time...@Mayor kicks Marines out of Toledo

1997...Charlotte...@Air Force "Invades" Charlotte Motor Speedway

@Marines plan urban exercises Sep 23, 2006

@"Marines will play war games in Boise: Downtown will be training zone for urban battles", by Patrick Orr, The Idaho Statesman, 2/20/2002.

Plenty of incidents over the years. Too much to document in short order.
I don't know about ammo used or not used.
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