Security checks are carried out in Baghdad after the abduction

Jalal Sharafi, the embassy's second secretary, was abducted from his car on Sunday in central Karrada district by men wearing Iraqi army uniforms.

Iran condemned the kidnapping and said it held the US responsible for his life. A US military spokesman said no US or Iraqi troops had been involved.

The news comes amid US-Iranian tension over Iranian activities in Iraq.

Last month in a dramatic pre-dawn helicopter raid, the Americans detained five Iranians in northern Iraq, prompting Iran to issue a formal protest to the US.

The US has denied any involvement in the latest incident, but recently has been expressing increasing concern about alleged Iranian support for militant activity in Iraq.

Correspondents say the stand-off over Iran's nuclear programme is adding to the tension.

On Tuesday, UK Prime Minister Tony Blair accused Iran of "a strategy to create maximum trouble" in the Middle East.

Identification puzzle

Iranian foreign ministry spokesman Mohammad Ali Hosseini told the Isna news agency that Mr Sharafi had been kidnapped by a group linked to Iraq's defence ministry "which works under the supervision of American forces".

We've checked with our units and it was not a [multinational forces - Iraq] unit that participated in that event

Lt Col Christopher Garver,

US military spokesman

"The Islamic Republic of Iran holds the American forces in Iraq responsible for the life and safety of the Iranian diplomat," he said.

Iraqi officials earlier said the gunmen were wearing uniforms of the Iraqi 36th Commando Battalion - a special Iraqi unit under US direction.

US military spokesman in Baghdad, Lt Col Christopher Garver, could not confirm the diplomat's abduction.

However, he said: "We've checked with our units and it was not a [multinational forces - Iraq] unit that participated in that event."

Mr Sharafi was reportedly kidnapped outside the Baghdad branch of the Iranian state-owned Bank Melli.

But the details of the abduction are still confused.

Kidnapping 'common'

An Iraqi government official told Associated Press news agency there had been a gun battle and a chase after the kidnapping but the car carrying the diplomat escaped.

RISING US-IRAN TENSION Dec 2006: US forces detain several Iranians in Iraq suspected of planning attacks. Iran says two are diplomats, who are later freed 10 Jan: US President Bush says in a major speech he will take a tough stance on Iran, whom he accuses of destabilising Iraq 11 Jan: US troops in Irbil raid a building Iran says was consulate, arresting five men 18 Jan: Iran demands the release of the five "diplomats". The US says they are Revolutionary Guard arming Shia fighters

Blair: No Iran attack planned

Some men were captured but the New York Times quoted Iraqi officials as saying they had legitimate defence ministry identification.

An official told the paper the men may have kept the identification after being dismissed. It is not thought they are still being held.

The BBC's Mike Wooldridge, in Baghdad, says the fact that the kidnappers were wearing uniforms can mean anything in Baghdad.

Kidnapping is common - often criminal rather than political - and frequently carried out by people in some kind of official uniform, he says.

But against the background of the ongoing disagreements between the US and Iran, this is quickly becoming another source of diplomatic tension, our correspondent adds.

Speaking to a committee of MPs in London, Prime Minister Tony Blair accused Iran of "a strategy to create maximum trouble" in the Middle East.

Mr Blair said Tehran was trying to prevent reconciliation in Iraq.

"People are alarmed at the strategy they are pursuing," he said.