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Iraq said on Sunday it has no evidence that Iran was supplying militias engaged in fierce street fighting with security forces in Baghdad.
Government spokesman Ali al-Dabbagh said there was no "hard evidence" of involvement by the neighbouring Shiite government of Iran in backing Shiite militiamen in the embattled country.
Asked about US reports that weapons captured from Shiite fighters bore 2008 markings suggesting Iranian involvement, Dabbagh said: "We don't have that kind of evidence... If there is hard evidence we will defend the country."
Tehran strongly opposes the US military presence in Iraq, while Washington has repeatedly accused Iranian groups of arming and training Shiite militia groups in its neighbour.
Iran, whose ties with Washington have been severed since 1980, strongly denies the allegations.
US military spokesman Rear Admiral Patrick Driscoll told reporters in the presence of Dabbagh that the Americans fully supported talks between Iran and Iraq on curbing the sectarian violence.
"We welcome all dialogue between Iran and Iraq," Driscoll said, adding that they supported any platform that could lead to an end to violence and ensure stability in Iraq where the US has deployed over 158,000 troops.
Dabbagh said an Iraqi parliamentary delegation which visited Iran last week had held useful discussions and secured assurances of support.
"They talked frankly about the fears and concerns in Iraq," he told reporters at a news conference in the tightly-guarded Green Zone of Baghdad where the Iraqi government and the US embassy are located.
He stressed that Iraq wanted closer relations with Iran. "What happend in the past is in the past," he said referring to the Iran-Iraq war in the 1980s.
Dabbagh said that Baghdad was keen to "reorganise" its relations with its former enemy, and that Tehran supported Baghdad government moves to curb violence.
"Iran supports the government and understands the need to eliminate all militia... and allow the rule of law," Dabbagh said, adding that the Iraqi team which went to Iran had the blessing of the government but was not "official."
Reports from Teheran on Sunday said Iran had warned Iraq against using excessive force in its crackdown against Shiite militias.
"We support the efforts of the Iraqi government to disarm the armed militia but we advise them not to confront the population," an official source, who was not named, told the student ISNA news agency in Tehran.
"The official position of the Islamic republic of Iran is to support the legal Iraqi government and we will do everything to ensure the security of the country," added the source.
Militiamen mostly loyal to Shiite cleric Moqtada al-Sadr, who according to his Najaf-based office is currently in Iran, have been battling US troops in Baghdad's Sadr City.
Sadr's Mahdi Army militants have fought running streetbattles with US and Iraqi forces since late March in the district, killing hundreds of people.
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