Washington: Senior al-Qaida leaders are "busy" in Iran, says US Defence Secretary Donald Rumsfeld, adding terrorist attacks recently in Saudi Arabia were directed by a small cell of terrorist leaders in Iran.

The 'New York Times' cited Bush administration officials as saying that intercepted communications strongly suggested that a small cell of al-Qaida leaders in Iran directed the May 12 suicide attacks in Riyadh. The United States was sending a strong protest to Tehran, the report said.

The United States said it had delivered a blunt demand to Iran that it act against suspected al-Qaida operatives on its territory, amid reports that it has decided to adopt a much tougher line on the Islamic republic.

The State Department said a protest on the matter had been delivered to Iran through unspecified means earlier this week and would continue to register its complaints until Tehran acted on them.

"We've called on Iran ... to meet their responsibilities under UN Security Council Resolution 1373: to deny safe haven to those who plan, support and commit terrorist acts, and to affirmatively take steps to prevent the commission of terrorist acts by providing early warning to other states by exchange of information," spokesman Richard Boucher said.

"We'll continue to pursue those issues in a variety of ways with the government of Iran and with all governments around the world," Boucher added. He declined to name the operatives believed to be in Iran and refused to confirm a ‘Los Angeles Times’ report that the United States had decided to suspend a recently begun secret dialogue with Iranian officials.

Meanwhile, Iranian spokesman denied US accusations saying, "The only al-Qaida members that we know of are the ones that have been expelled from Iran. If any exist in Iran they have entered illegally and we have no information about them."

"Any Iranian citizen or foreign security organisation which has information about the presence of people suspected of having links to al-Qaida in Iran should provide us with that information and we will immediately take action and expel them quickly," he added.

ANI