Iraq Shi'ite militants little threat in Basra: U.S.

WASHINGTON (Reuters) - Iranian support for Shi'ite militants in the southern Iraqi city of Basra appears to have dried up, forcing some to pursue extortion as a way to make money, a U.S. Army commander said on Tuesday.

Colonel Butch Kievenaar, commander of the Army 4th Infantry Division's 2nd Brigade Combat Team, said Shi'ite militias that once engulfed Basra now pose no serious security threat to the city that serves as hub of Iraqi oil exports.

"I don't see a significant threat," Kievenaar told reporters in a video link from Iraq. "And I do not see anything in the foreseeable future that cannot be handled by the Iraqi security forces,"

He said Iran continues to support selected militia organizations in the Basra area, particularly the Shi'ite insurgent group Kata'ib Hezbollah.

But Iranian backing for militants has diminished significantly overall, in a city where the Iraqi government launched a military operation to break the hold of militant groups 16 months ago.

"They're not receiving the (Iranian) money, so they can't pay the people that used to work as part of their groups," the colonel said.

"They're not able as freely as they were before to get the resources with which to then be able to attack Iraqi security forces or us," he added.

Kievenaar said he believes former militia leaders are now mainly pursuing criminal agendas rather than political ones, and trying to control sections of Basra "where they can extort money."

Fewer than 200 U.S. troops have remained in the city of Basra to serve as advisors and trainers to the Iraqi security forces, since the June 30 deadline for U.S. combat forces to withdraw from Iraqi towns and cities, the colonel said.

(Reporting by David Morgan; Editing by Cynthia Osterman)