U.S. Gen. David Petraeus testifies on the situation of Iraq before the House Armed Services Committee on Capitol Hill in Washington, 10 Sep 2007

The top U.S. general in Iraq has accused Iran of seeking to fight a "proxy war" with the Iraqi state and coalition forces by supporting Iraqi Shi'ite militants.

In his testimony before U.S. lawmakers Monday in Washington, General David Petraeus said Iran is trying to create a force in Iraq like the Hezbollah Shi'ite militia in Lebanon.

U.S. ambassador to Iraq, Ryan Crocker, warned that Iran would step into the vacuum if U.S. forces leave Iraq prematurely.

Iran has denied repeated U.S. allegations that it is supporting Shi'ite militants in Iraq.

The Wall Street Journal newspaper today reports the U.S. military is preparing to build its first base for American forces in Iraq near the border with Iran -- in an effort to stop the alleged weapons flow from Iran.

The report says the new base will have living quarters for at least 200 soldiers, and will be about six-and-one-half kilometers from the Iranian border.

A U.S. Defense Department spokesman, Bryan Whitman, would not discuss details about the base, but said it demonstrates the importance of border security.