The United States has growing evidence of Tehran's involvement in destabilizing Iraq, with more sophisticated Iranian weapons being found, a senior State Department official said on Tuesday.

Jim Jeffrey, principal deputy assistant secretary of State for Near East Affairs, said Iranian interference in Iraq had intensified in recent months. Tehran denies this.

He said over the last couple of months many more recently manufactured Iranian rockets and other "modern munitions" had found their way into Iraq. He did not provide figures.

Five Iranians were detained by U.S. forces in January in a raid in the Iraqi town of Arbil. The Iranians have demanded their release and said they were diplomats.

But Jeffrey said the five were linked with Iranian Revolutionary Guard (IRG) networks involved in providing explosive devices used to attack U.S. troops in Iraq.

Some Iraqi officials have lobbied to get the five released, saying it might ease the crisis involving Iran's seizure last month of 15 British sailors who Tehran says strayed into Iranian waters. Britain says they were in Iraqi waters.

At a meeting of Iraq's neighbors last month, the United States appealed directly to Iran to stop meddling in Iraq. Tehran, in turn, demanded the release of the five men detained in Arbil as well as an Iranian diplomat held by Iraqi forces who was released on Tuesday.

A follow-up neighbors meeting, which U.S. Secretary of State        Condoleezza Rice is expected to attend along with other ministers, was planned this month, possibly in Istanbul, but no date or venue has been set.

The British sailors' crisis is believed to be holding up such a meeting, but Jeffrey said the plan was still to move ahead with it once a venue and time was agreed upon.

The United States is at loggerheads with Iran over its nuclear program and has spearheaded U.N. sanctions against Tehran in a bid to get it to give up uranium enrichment.

Speaking to U.S. editorial writers on Monday, Rice said if the circumstances were right, she would not rule out meeting Iran bilaterally, but she reiterated this would only be if Tehran agreed to suspend enrichment of uranium.

Previously, Rice has said she would meet with Iran only in a multilateral context, along with other nations dealing with Iran over its nuclear ambitions.

"This was a clarification of where she (Rice) has been for some time. She does believe that if we do get the Iranians to accept a suspension (of uranium reprocessing) ... then we are willing to talk," Jeffrey said.

PHOTO CAPTION

Iraqi municipality workers load bodies of victims into the back of a truck as they take them out of a hospital's morgue in Kirkuk. (AFP)