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BAGHDAD (Reuters) - U.S. intelligence reports indicate there are about 50 members of Iran's Revolutionary Guards training Shi'ite militias in how to use mortars and rockets in southern Iraq, a U.S. general said on Sunday.
In Tehran, Foreign Ministry spokesman Mohammad Ali Hosseini dismissed the accusation as "completely baseless".
U.S. Major-General Rick Lynch, whose forces south of Baghdad are battling a mixture of Sunni Islamist and Shi'ite militants, said many of the 25 soldiers killed in his area in the past 60 days were hit by what the U.S. military calls "indirect fire".
"The enemy is ramping up indirect fire attacks. The enemy is more aggressive. The great concern is about the Iranian munitions he is using," Lynch told reporters in Baghdad.
"We have some members of the Iranian Revolutionary Guards Corps. They are facilitating training of Shi'ite extremists. In my battle space ... we think there are about 50 members."
U.S. officials and military commanders have stepped up their accusations against Iran in recent weeks, charging Iraq's neighbor of playing a spoiling role to influence a September progress report on the war due to be presented next month.
Lynch said U.S. troops had so far failed to seize any weapon shipments coming across the Iranian border and that no Revolutionary Guards member had been captured in his area of responsibility.
However, he said his troops had captured 217 weapons with Iranian markings on them since April, in a period coinciding with an increase in rocket and mortar attacks on U.S. soldiers.
Intelligence suggested that explosively formed penetrators, a particularly deadly roadside bomb that has claimed the lives of scores of U.S. soldiers, were being built in Iran and then smuggled into Iraq to be assembled there.
Iran has denied such charges and blames the 2003 U.S.-led invasion for the sectarian violence between majority Shi'ites and minority Sunni Arabs that has killed tens of thousands.
Lynch's deputy, Brigadier-General Ed Cardon, said a blocking force of about 2,000 Georgian soldiers was to be deployed in Wasit province southeast of Baghdad to thwart the smuggling of any weapons from Iran.
The province shares a 200-km (120-mile) stretch of porous border with Iran. It has only one official border crossing but there are a number of smuggling routes north and south of it.
Lynch, whose "battle space" includes the "Triangle of Death", a notorious Sunni Arab militant stronghold, and rival Shi'ite militias, has launched a series of operations to block the flow of weapons and fighters into Baghdad and stop the area being used as a launchpad for attacks.
U.S. troops have begun an offensive in provinces bordering Baghdad, targeting al Qaeda and Shi'ite militias, to buy time for Iraq's leaders to broker a workable power sharing deal between Shi'ite Muslims, Sunni Arabs and Kurds.
"We believe we have the enemy on the run. We are in a pursuit phase," Lynch said.
He said there had been a 20 percent decline in violence in his area in the past 60 days, from 20 attacks a day to 16, and a 36 percent decline in civilian casualties.
But there has been an increase in attacks on U.S. soldiers.
He thumbed through a pack of plastic-laminated cards tied together by a rubber band that he pulled from the left leg pocket of his battledress. Each bore a number and the photograph of a U.S. soldier killed since April. The last number was 71.
Additional reporting by Tehran bureau