U.S. says Iran still training Iraqi militias

By Ross Colvin

BAGHDAD (Reuters) - The U.S. military said on Sunday there had been a dramatic drop in the number of Iranian weapons being smuggled into Iraq but no let-up in Tehran's training and financing of Iraqi militias.

Washington has accused Tehran of supplying Shi'ite militias with sophisticated weapons, including deadly armor-piercing bombs known as explosively formed penetrators (EFPs), to attack American troops. Tehran denies the charge.

"We do believe that the number of signature weapons that have come from Iran ... are down dramatically. We do not think levels of training have been reduced at all. We don't believe levels of financing are reduced," U.S. military spokesman Rear Admiral Greg Smith told reporters in Baghdad.

His comments come at a time of heightened tensions between Iran and the United States after Washington said its warships were threatened by Iranian craft in the Strait of Hormuz earlier this month. The two countries are already at odds over Iran's determination to pursue a nuclear program.

U.S. officials had softened their rhetoric towards Iran in recent weeks, partly attributing a sharp drop in violence in Iraq since June to Iran stemming the flow of smuggled weapons. U.S. forces also released a number of Iranian detainees.

Smith said an upswing in the number of EFP attacks reported in the first two weeks of January had been followed by a dip in the third week of the month.

"There was an increase, we don't know why precisely ... and now they have returned to normal levels," he said. "It is uncertain what is happening inside Iran to lead to that occurrence."

U.S.-IRANIAN MEETING