Iranian money found in Baghdad raid-US military

BAGHDAD, May 23 (Reuters) A large quantity of Iranian currency was found when US troops uncovered a cache of bomb-making materials in a raid on a Shi'ite stronghold in western Baghdad on Wednesday, the US military said.

The United States has accused Iran of fomenting violence in Iraq by backing Shi'ite militias, and of providing weapons and the technology for particularly deadly roadside bombs.

The military said two militants were killed in today's raid and 19 people were detained during a search of 11 buildings in Sadr City, a sprawling Shi'ite slum which is a stronghold of anti-American cleric Moqtada al-Sadr.

''The individual targeted during the raid is suspected of facilitating weapons shipments from Iran to secret cell terrorist elements in Baghdad, Basra and Maysan provinces,'' the US military said in a statement.

A search of the buildings uncovered ''a large quantity of Iranian money'' as well as ,000 and bomb-making materials, the statement said.

Ambassadors from the United States and Iran will meet in Iraq on May 28 to discuss security in the country, a rare meeting between the two bitter rivals.

Iran denies it is fomenting violence in Iraq and accuses the United States of igniting tension between Iraq's Shi'ites and Sunni Muslims.

The US military said on Monday it had killed Azhar al-Dulaimi, the mastermind of an audacious attack in January on a government compound in the holy Shi'ite city of Kerbala.

One US soldier was killed during the raid on the Kerbala compound by men dressed in US military uniforms. Four other US soldiers were abducted and later killed.

US military spokesman Lieutenant-Colonel Christopher Garver said there was no evidence Iranian elements had been involved in that attack but said Dulaimi had reported back to Iran afterwards.

Dulaimi was cornered on a rooftop in Sadr City last Friday. He surrendered and was shot when he grabbed for a soldier's gun, Garver said.

Reuters SLD GC2134