Iran has dismissed U.S. claims that Tehran is arming insurgents who have played a role in attacks on American soldiers in Iraq.
Iran's state-run media on Wednesday quoted Intelligence Minister Heidar Moslehi as saying the claims are baseless. The reports also say Foreign Ministry spokesman Ramin Mehmanparast described them as a "big lie."
On Monday, U.S. Defense Secretary Leon Panetta said U.S. forces in Iraq would act against Iran's arming of Shi'ite militants blamed for a wave of attacks in Iraq.
In June, attacks by suspected Shi'ite insurgents killed 14 U.S. soldiers in Iraq. At least two more soldiers have been killed in attacks this month.
During a speech to U.S. soldiers in Baghdad, Panetta said the U.S. would not "stand back" as the attacks continued but would, instead, respond to such threats unilaterally.
Iran has in recent months been increasing diplomatic and trade relations with Iraq.
Some information for this report was provided by AP, AFP and Reuters.